Latest news with #Japan
The Independent
16 minutes ago
- Automotive
- The Independent
Trump promised to back Detroit automakers - his deal with Japan has them shaking in their boots
General Motors, Ford and Stellantis - the big three U.S. automakers - pushed back against the Trump administration after President Donald Trump announced a trade deal with Japan that would lower tariffs on vehicles made overseas and hurt the American car companies. Earlier this week, the president said he had signed the 'largest' trade deal in history with Japan, which would include a 15 percent tariff on imported cars – significantly lower than the 25 percent tariff on other imported vehicles. Trump announced the 25 percent tariff on cars made overseas earlier this year, and many of Detroit's companies manufacture cars in Mexico and Canada, which would make them subject to the 25 percent tariff. Higher tariffs likely mean higher costs for consumers, which could lead people to turn to the cheaper Japan-made models. 'Any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers,' Matt Blunt, the head of the American Automotive Policy Council, which represents the big three Detroit auotmakers, said in a statement. Blunt said American Automakers were still reviewing the terms of the agreement. During the campaign, Trump visited Detroit and touted the American car industry, promising to 'revolutionize' it. However, shortly after taking the White House, he quickly imposed tariffs on all cars made overseas. General Motors warned just this week that it expects a $4 to $5 billion impact from Trump's tariffs. Auto Drive America, a group that represents U.S. operations of foreign vehicle makers, praised the Japan deal while also calling for Trump to reach similar agreements with the European Union, South Korea, Canada and Mexico. 'We share President Trump's vision to make the U.S. the worldwide center of automotive production, and our member companies need stability in order to create an environment where we can maintain our competitive edge both in the U.S. and on the global stage,' Auto Drive America said. While the deal with Japan will impose lower tariffs, Trump said it will also open market access to the U.S. U.S. auto manufacturers have long struggled to infiltrate the Japanese market, in part because smaller cars that drive on the left side of the road are in much more demand – the type that the U.S. does not typically make. Kush Desai, a spokesperson for the White House, said, 'No president has taken a greater interest in restoring the American auto industry's dominance than President Trump, and his Administration is working closely with the auto industry to achieve this goal.' 'President Trump's trade agenda has already secured historic market access to Japan and Indonesia for Made in America cars with more America First trade deals to come,' Desai added. 'The Administration's domestic policy agenda – from rapid deregulation to the pro-growth tax cuts of The One Big Beautiful Bill – will further boost our auto industry's competitiveness on the world stage and Make American Automakers Great Again.' Hoping to stimulate U.S. manufacturing, the president imposed lofty automotive tariffs earlier this year. Automakers initially raised concerns with the 25 percent tariff in addition to other levies such as those on steel and aluminum. After, Trump offered U.S. automakers some relief through a complicated discount program. Two of the big three Detroit automakers appear to have suffered setbacks. General Motors said Tuesday its second-quarter earnings plummeted 35 percent, compared to the same quarter last year. It also reported a $1 billion loss in second-quarter profits. Stellantis, which makes Chryslers, Jeeps, and more, said it expects to see nearly $350 million in losses in the first two quarters of the year, in part due to tariffs. Around 60 percent of car parts are imported, even if the car is finally assembled in the U.S. Every single 2025 model car sold in the U.S. had at least 15 percent of its parts from a country outside of North America. Trump has threatened to hike tariffs on the U.S.'s largest trading partners, Mexico and Canada, to 30 and 35 percent, respectively.
CNA
41 minutes ago
- Business
- CNA
Dollar holds steady after ECB leaves rates alone, tariffs and Fed in focus
The dollar traded sideways against the euro on Thursday after the European Central Bank held rates steady, and was wedged between prospects for higher Japanese rates that supported the yen and worries about political risk after Sunday's elections. The European Central Bank left interest rates steady at 2 per cent, as expected, on Thursday, taking a break after a year of policy easing to wait for clarity over Europe's future trade relations with the United States. "The view that the ECB is probably on hold here is probably gaining a bit more traction. We've trimmed expectations for the cuts in September to certainly less than 50/50," said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto. The Japanese central bank's deputy governor, Shinichi Uchida, said Tuesday's trade deal with Washington had reduced economic uncertainty, comments that fuelled optimism in the market about the potential resumption of interest rate hikes. Analysts believe the yen will face persistent headwinds after Sunday's upper house election, with the opposition considering a no-confidence motion. The European Union is nearing a deal that would impose a broad 15 per cent tariff on EU goods, diplomats said. The rate, which could also extend to cars, would mirror the framework agreement the United States struck with Japan. "The ECB faces a challenge that is quantitatively different from the BoJ's," said Thierry Wizman, global forex and rates strategist at Macquarie Group. "The euro has appreciated by far more than the JPY so far in 2025, meaning that the disinflationary impulse from U.S. import tariffs may be greater in the EU than in Japan, or the ECB may suspect as much," he added. PMI data showed fragility in France following budget-cut proposals there, but also resilience in Germany and other parts of the euro zone. Data showed that German business activity continued to grow marginally in July. "As of now, there has been very little tariff impact on the hard data," said Mohit Kumar, economist at Jefferies. ECONOMIC FALLOUT Meanwhile, risk assets rallied as the trade deals eased fears over the economic fallout of a global trade war. Next week the Federal Open Market Committee meets and is expected to leave rates where they are as policy makers wait for the expected impact from tariffs on inflation and growth to show up. A number of U.S. employment releases next week culminate with Friday's big June payrolls report, while the July Personal Consumption Expenditures Price Index and the first revision to 2nd quarter Gross Domestic Product could also move markets. "A lot of event risk next week and not just from the Fed, we've got a lot of data next week as well, so that's probably going to shape expectations to some extent for September," Osborne said. The euro was 0.17 per cent firmer at $1.1786, not far from $1.1830 it hit earlier this month, which marked its strongest level in more than three years. Against the yen, the dollar was 0.07 per cent weaker at 146.39, and hit a fresh 2-week low earlier in the session at 145.86. Olivier Korber, forex strategist at Societe Generale, expects the yen to strengthen further, citing support from the trade deal and prospects for higher interest rates. Ishiba denied on Wednesday he had decided to quit after a source and media reports said he planned to announce his resignation to take responsibility for a bruising upper house election defeat. Currencies mostly shrugged off news that U.S. President Donald Trump, a vocal critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday, a surprise move that escalates tensions between the administration and the Fed. The dollar index, which measures the greenback against a basket of six currencies including the euro and yen, was off 0.03 per cent at 97.17.
Yahoo
44 minutes ago
- Automotive
- Yahoo
Trump's Japan Trade Deal Raises Fears He Gave Away Too Much
(Bloomberg) -- US industries and protectionists are raising alarms with President Donald Trump's pact with Japan, saying it risks undercutting his stated goals of rebalancing America's trading relationships and reviving domestic manufacturing. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Trump and his top negotiators on Wednesday hailed the deal as a potential model for other countries hoping to win tariff concessions, citing Tokyo's pledge to create a $550 billion fund for US investments. The president's decision to grant Japan relief on automobiles, however, provoked criticism that the agreement wouldn't address the main source of the US's trade deficit with Japan even as it disadvantages Detroit's Big Three. Around 80% of the US-Japan trade gap is in cars and car parts. Tuesday's announcement marked the latest signal that Trump is willing to negotiate on industry-specific duties on products including chips and pharmaceuticals, potentially undermining the most durable pillar of his tariff strategy. The reaction underscores the risks of the president's transactional negotiating style. Industries that have championed much of Trump's trade strategy and stand to benefit from robust levies on foreign rivals could be left in the lurch as his plans shift. 'Any deal that charges a lower tariff for Japanese imports with virtually no US content than it does North American built vehicles with high US content is a bad deal for the US industry and US auto workers,' said Matt Blunt, president of the American Automotive Policy Council that represents Ford Motor Co., General Motors Co. and Stellantis NV. Trump defended his approach, which resulted in a deal to reduce Japan's country-specific rate to 15% and put US levies on cars and parts at the same level — lower than the 25% global charge on vehicles. 'I WILL ONLY LOWER TARIFFS IF A COUNTRY AGREES TO OPEN ITS MARKET. IF NOT, MUCH HIGHER TARIFFS! Japan's Markets are now OPEN (for first time ever!). USA BUSINESSES WILL BOOM!' Trump posted. His Commerce Secretary, Howard Lutnick, on Thursday called gripes from US automakers 'silly' and said that manufacturing executives he spoke to 'are cool with it.' 'When your competitor goes from 25% against them to 15% against them, I guess you're a little bummed out. But come on, there's no tariff if you build it in America,' Lutnick said on CNBC. Lutnick argued in a Bloomberg Television interview on Wednesday that the deal was also ratcheting up pressure on South Korea and Europe to make additional concessions or risk their automakers being left at a significant disadvantage. And White House Press Secretary Karoline Leavitt said Trump's approach was breaking down barriers for US products abroad. 'Thanks to President Trump, these countries around the world are agreeing to open their markets to American-made products and goods for the first time, which will lead to a boom in sales and profits for American businesses right here at home,' she told reporters Wednesday. Even so, automakers and other industry stakeholders were crying foul Wednesday. They warned that giving Japan an unlimited reduction on auto tariffs undermines the use of those levies not just for cars, but also metals, semiconductors and other goods. 'Unlimited imports at tariff rates below existing Section 232 rates critically undermine' the intention of the law and could actually encourage offshoring, said Jon Toomey, executive director of the Coalition for a Prosperous America, an advocacy group representing import-threatened industries that supports tighter trade controls. The provision on Japanese autos is far more expansive than the steel and aluminum tariff reduction Trump gave the UK, which allows a limited quota of imports to enter the US at a reduced rate. Industry-specific tariffs imposed under Section 232 of the Trade Expansion Act are seen as a more lasting tool than Trump's country-based tariffs for boosting the competitiveness of US-made goods, since they rest on stronger legal footing, and some have endured across multiple presidencies. Industry groups also say the product-specific rates provide certainty needed to drive investment in domestic manufacturing plants. Other countries already are clamoring for sectoral tariff relief, and the US-Japan trade deal sends a signal that they are up for negotiation, people familiar with the matter said. Two of those individuals predicted the agreement will also add leverage to the auto and oil industries' pleas for relief from steel duties. 'It doesn't make sense to allow for unlimited vehicle imports at 15%, while charging rates of 25% on auto parts and 50% on steel,' Toomey added. It's also unclear how and when the $550 billion investment fund might come to pass — or if it will prove to be as illusory as investment pledges Trump secured during his first term from China in exchange for scaling down tariffs. Although Beijing promised in 2020 to buy $200 billion in additional US agricultural commodities and other goods, ultimately only 58% of those purchases materialized amid the pandemic, according to the Peterson Institute for International Economics. Trump administration officials cast the Japan deal, as well as frameworks with Indonesia and the Philippines, as incentive for other major partners, including the European Union and South Korea, to bring their best investment and purchasing pledges to the table. 'It spurs other deals along,' White House trade adviser Peter Navarro said in a Bloomberg Television interview. Treasury Secretary Scott Bessent made clear the investment plan helped Japan secure its tariff reduction, telling Bloomberg Television: 'They got the 15% rate because they were willing to provide this innovative financing mechanism.' Lutnick said on the network that under the arrangement Japan will serve as a financier providing equity, loans and other support for manufacturing plants, infrastructure and other projects in the US. Other countries will be under pressure to follow the investment model, said a senior administration official who asked for anonymity because details haven't been formally announced. The investment deals could prove especially attractive to Trump, who frequently extols planned spending in the US announced since his January inauguration. The president and top administration officials also regularly tout the surge in revenue from new tariffs, which have already brought in $113 billion this year, according to the Treasury Department. The US-Japan deal's emphasis on investment suggests the promise of more revenues has taken priority over the push to protect domestic industries, one person familiar with the matter said. While direct foreign investment in the US could help expand domestic manufacturing and artificial intelligence capacity, it won't necessarily make the country's exports more competitive on its own. And some analysts raised doubts about whether Japan's promises to open its markets to US products would prove meaningful. The administration cast Japan's concession to accept cars made to US federal motor vehicle safety standards instead of subjecting them to additional regulatory requirements as a boon for Detroit. Even so, a major impediment to US auto sales in Japan is the American designs themselves — not just trade barriers. Put simply, Japanese consumers are less interested in driving Fords and GMs than Americans are in Toyotas and Hondas. Japan sells the US about 84 cars for every one the US sells there. 'American cars that are big just don't comport well with the needs, desires and demands of the Japanese public' said Colin Grabow, an associate director at the Cato Institute's trade policy center. 'It's unclear what the payoff here is.' --With assistance from Keith Laing, Hadriana Lowenkron, Joe Mathieu, Tyler Kendall and Stephanie Lai. (Adds Lutnick comments in ninth and 10th paragraph) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
44 minutes ago
- Automotive
- Yahoo
Japanese chipmaker goes bankrupt amid pressure from Chinese rivals
Japanese chipmaker goes bankrupt amid pressure from Chinese rivals originally appeared on TheStreet. A once-promising Japanese chipmaker has collapsed under mounting debt, a slowdown in electric vehicle (EV) sales, and a surge in supply from Chinese rivals. The company filed for bankruptcy protection last week, less than three years after its widely heralded launch in late 2022. The firm was backed by Japanese government-linked financial institutions and focused on producing power semiconductors critical to power electronics markets, including electric vehicles (EVs), industrial equipment, and home appliances. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💵 With strong public support and a refurbished factory previously operated by a major U.S. chipmaker, the company appeared poised to become a key domestic player in an industry viewed as essential to Japan's national security and economic development. But faced with mounting debt driven by deteriorating electric vehicle demand and a flood of low-cost components from fast-growing Chinese rivals, the startup's business model proved chipmaker JS Foundry, also known as JS Fab, launched in December 2022 with the backing of a fund run by the Development Bank of Japan and created by Mercuria Investment and Sangyo Sosei Advisory. JS Foundry filed for bankruptcy protection with the Tokyo District Court last week, leaving behind an estimated $110 million in outstanding debt. In a bid to minimize upfront costs, JS Foundry inherited its manufacturing facility, a 41-year-old fab in Niigata Prefecture, from U.S.-based On Semiconductor () . The legacy infrastructure proved inadequate for the demanding process requirements of silicon carbide (SiC) device fabrication — a notoriously capital-intensive industry — possibly compounding JS Foundry's financial woes. JS Foundry's revenue plummets as key partnership ends and EV sales decline JS Foundry's revenue surged in 2023, with sales swelling to around 10 billion yen (nearly $68 million) in its first year. Yet in 2024, revenue plummeted to 2.6 billion yen (around $17.6 million). This sharp decline followed the end of a production arrangement with On Semiconductor (stemming from On's divestment of its Japan facility in late 2022). More EV Stock News: Tesla robotaxi launch hits major speed bump Struggling semiconductor company gets second chance to avoid bankruptcy Tesla's robotaxi rollout runs into trouble JS Foundry's cash flows turned steeply negative, and the planned disbursement of subsidies from central and local governments in the coming weeks would have arrived too late to cover its mounting financial obligations. To make matters worse, the global downturn in EV sales hit the company especially hard. Rising interest rates, subsidy rollbacks, and underdeveloped charging infrastructure dampened enthusiasm for EVs, forcing automakers to slash chip orders. JS Foundry struggles to keep up with competitors Compounding JS Foundry's financial woes, heavily subsidized Chinese chipmakers flooded the global market with affordable power semiconductor alternatives, making it clear that the startup lacked the necessary scale and vertical integration to compete. Finally, JS Foundry attempted talks with overseas investors to form a capital tie-up that would have helped it enter the silicon carbide power semiconductor segment, a next-generation technology known for its superior power those talks collapsed earlier this year, effectively cutting off JS Foundry's last remaining viable path to survival. JS Foundry's collapse comes amid broader turmoil in the power semiconductor space. Rohm, another Japanese chip giant, recently reported its first net loss in over a decade, blaming underperforming power semiconductor investments. Last month, U.S.-based Wolfspeed () , previously known as Cree, filed for Chapter 11 bankruptcy. The move triggered major write-downs for Japanese chipmaker Renasas Electronics, which had extended financing to Wolfspeed. Renansas subsequently abandoned plans to start SiC production later this year. In the end, JS Foundry's demise serves as a cautionary illustration of the risks of investing in a capital-intensive market where geopolitics, macroeconomic volatility, and technological disruption can rapidly upend even the most promising, initially well-capitalized businesses. Japanese chipmaker goes bankrupt amid pressure from Chinese rivals first appeared on TheStreet on Jul 24, 2025 This story was originally reported by TheStreet on Jul 24, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
an hour ago
- Business
- Bloomberg
M&A Deals Down, Fed to Cut in December, Nomura's Wilcox Says
Christopher Wilcox, chair of Nomura's investment management division, says M&A deals have dropped to the lowest levels in "many, many years" but the value of the deals have remained relatively stable on "Bloomberg Open Interest." (Source: Bloomberg)
