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The Mainichi
5 days ago
- Automotive
- The Mainichi
US automakers say Trump's 15% tariff deal with Japan puts them at a disadvantage
WASHINGTON (AP) -- U.S. automakers worry that President Donald Trump's agreement to tariff Japanese vehicles at 15% would put them at a competitive disadvantage, saying they will face steeper import taxes on steel, aluminum and parts than their competitors. "We need to review all the details of the agreement, but this is a deal that will charge lower tariffs on Japanese autos with no U.S. content," said Matt Blunt, president of the American Automotive Policy Council, which represents the Big 3 American automakers, General Motors, Ford and Jeep-maker Stellantis. Blunt said in an interview the U.S. companies and workers "definitely are at a disadvantage" because they face a 50% tariff on steel and aluminum and a 25% tariff on parts and finished vehicles, with some exceptions for products covered under the United States-Mexico-Canada Agreement that went into effect in 2020. The domestic automaker reaction reveals the challenge of enforcing policies across the world economy, showing that for all of Trump's promises there can be genuine tradeoffs from policy choices that risk serious blowback in politically important states such as Michigan and Wisconsin, where automaking is both a source of income and of identity. The United Auto Workers said in a statement it was "deeply angered" by the deal. "A better deal would have held Japanese automakers to the same standards U.S. workers have fought for at GM, Ford, and Stellantis," the UAW said. "If this becomes the blueprint for trade with Europe or South Korea, it will be a major missed opportunity," the union added. "We need trade deals that raise standards -- not reward the race to the bottom. This deal does the opposite." Trump portrayed the trade framework as a major win after announcing it on Tuesday, saying it would add hundreds of thousands of jobs to the U.S. economy and open the Japanese economy in ways that could close a persistent trade imbalance. The agreement includes a 15% tariff that replaces the 25% import tax the Republican president had threatened to charge starting on Aug. 1. Japan would also put together $550 billion to invest in U.S. projects at the "direction" of the president, the White House said. The framework with Japan will remove regulations that prevent American vehicles from being sold in that country, the White House has said, adding that it would be possible for vehicles built in Detroit to be shipped directly to Japan and ready to be sold. But Blunt said that foreign auto producers, including the U.S., Europe and South Korea, have just a 6% share in Japan, raising skepticism that simply having the open market that the Trump administration says will exist in that country will be sufficient. "Tough nut to crack, and I'd be very surprised if we see any meaningful market penetration in Japan," Blunt said. Asked at Wednesday's briefing about whether Trump's sectoral tariffs such as those on autos were now subject to possible change, White House press secretary Karoline Leavitt said that the issue had been going through the Commerce Department. The framework with Japan was also an indication that some nations simply saw it as preferential to have a set tariff rate rather than be whipsawed by Trump's changes on import taxes since April. But for the moment, both Japan and the United Kingdom with its quotas on auto exports might enjoy a competitive edge in the U.S. "With this agreement in place it provides Japan with a near-term operating cost advantage compared to other foreign automakers, and even some domestic U.S. product that uses a high degree of both foreign production and parts content," said Karl Brauer, executive analyst at iSeeCars. "It will be interesting to see if this is the first domino to fall in a series of foreign countries that decide long-term stability is more important that short term disputes over specific tariff rates." Autos Drive America, an organization that represents major Japanese companies Toyota, Honda and Nissan and other international automakers, said in a statement that it is "encouraged" by the announced trade framework and noted its members have exceeded domestic automaker production for the past two years. The statement urged "the Trump administration to swiftly reach similar agreements with other allies and partners, especially the European Union, South Korea, Canada and Mexico." The Japanese framework could give automakers and other countries grounds for pushing for changes in the Trump administration's tariffs regime. The president has previously said that he values flexibility in negotiating import taxes. The USMCA is up for review next year. Ford, GM and Stellantis do "have every right to be upset," said Sam Fiorani, vice president at consultancy AutoForecast Solutions. But "Honda, Toyota, and Nissan still import vehicles from Mexico and Canada, where the current levels of tariffs can be higher than those applied to Japanese imports. Most of the high-volume models from Japanese brands are already produced in North America." Fiorani noted that among the few exceptions are the Toyota 4Runner, the Mazda CX-5 and the Subaru Forester, but most of the other imports fill niches that are too small to warrant production in the U.S. "There will be negotiations between the U.S. and Canada and Mexico, and it will probably result in tariffs no higher than 15%," Fiorani added, "but nobody seems to be in a hurry to negotiate around the last Trump administration's free trade agreement."
New Straits Times
5 days ago
- Automotive
- New Straits Times
Japan trade deal sparks hope for US investors, frustration for automakers
DETROIT: Shares of General Motors, Ford Motor, and Jeep-maker Stellantis, some of the biggest automakers in the US, rallied on Wednesday after news of a trade deal that will reduce tariffs on imported Japanese cars, as investors saw it as a sign of more deals to come. But the companies are not celebrating. Automakers importing vehicles into the US from Japan now face a 15 per cent levy, according to terms of the deal outlined on Tuesday by US President Donald Trump, down from 27.5 per cent. GM shares rallied 9 per cent and Stellantis rose 12 per cent, as market watchers said they anticipated further agreements could reduce other trade barriers that have hurt the companies' profits. Ford shares rose about 2 per cent. The automaker is less exposed to tariffs because it produces more of its US-sold vehicles domestically. On Wednesday, the European Union and United States were nearing a trade deal that would also set a 15 per cent tariff on European imports. GM, Ford and Stellantis have been paying up to 25 per cent on vehicles imported from Mexico or Canada, depending on how much US content is in the vehicles. The companies are concerned they could soon be paying higher tariffs on vehicles assembled in Mexico or Canada than on vehicles with significantly less US content made in Japan or the United Kingdom. Some lobbyists also expressed alarm that if South Korea strikes a similar deal with the US, it could become a low-cost market to assemble cars and trucks. "They could be the new Mexico," one lobbyist told Reuters. The American Automotive Policy Council, which represents the Detroit Three, criticised the deal, saying it creates an easier path for Japanese imports than for some cars built in North America. Even before Tuesday's deal, Detroit automotive executives raised concerns that Trump's trade policy could end up giving an edge to foreign automakers who do not invest as heavily in US manufacturing. "This is a bonanza for our import competitors," Ford CEO Jim Farley said in February, when Trump initially proposed levies on Mexico and Canada, but not on major automotive centres such as South Korea. The United Auto Workers union, which represents workers at the Detroit Three automakers, said it was "deeply angered" by the deal. "What we've seen so far makes one thing clear: American workers are once again being left behind," the union said in a statement on Wednesday evening. The Japan trade announcement came the same day General Motors said tariff costs knocked US$1.1 billion from its bottom line, hurt by a battery of levies including 25 per cent taxes on imports from Canada and Mexico, and 50 per cent on steel and aluminium imports. Industry consultant and former GM executive Warren Browne said the Japan deal "put all vehicles produced in Mexico and Canada by the Detroit Three at a disadvantage" because they face higher levies than Toyota vehicles shipped in from Japan, for example. That could allow the foreign brands to undercut US car companies on price. Toyota, Subaru and Mazda are among the most reliant companies on Japan-produced vehicles for their US sales, and stand to benefit most from the lower tariffs, according to business-analytics firm GlobalData. Toyota imported roughly 500,000 vehicles from Japan last year. Japanese automotive stocks soared after the trade deal announcement. Autos Drive America, which represents those Japanese automakers along with other foreign car companies operating in the US, on Wednesday praised the trade deal, saying it would lead to further factory investment in the US. The deal is good news for Wade Kawasaki, executive chairman of the Wheel Group, a collection of aftermarket wheel, tyre and accessory companies based in California. Kawasaki said the group has been trying to break into some aspects of the Japanese market, and the lessening levies will help with that. "There is a certain group of customers who want American-made products. Those are the ones we were going to get," he said.
Business Times
5 days ago
- Automotive
- Business Times
Japan trade deal sparks hope for US investors, frustration for automakers
[DETROIT] Shares of General Motors, Ford Motor and Jeep-maker Stellantis, some of the biggest automakers in the US, rallied on Wednesday after news of a trade deal that will reduce tariffs on imported Japanese cars, as investors saw it as a sign of more deals to come. But the companies are not celebrating. Automakers importing vehicles into the US from Japan now face a 15 per cent levy, according to terms of the deal outlined on Tuesday by US President Donald Trump, down from 27.5 per cent. GM shares rallied 9 per cent and Stellantis rose 12 per cent, as market watchers said they anticipated further agreements could reduce other trade barriers that have hurt the companies' profits. Ford shares rose about 2 per cent. The automaker is less exposed to tariffs because it produces more of its US-sold vehicles domestically. On Wednesday, the European Union and United States were nearing a trade deal that would also set a 15 per cent tariff on European imports. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up GM, Ford and Stellantis have been paying up to 25 per cent on vehicles imported from Mexico or Canada, depending on how much US content is in the vehicles. The companies are concerned they could soon be paying higher tariffs on vehicles assembled in Mexico or Canada than on vehicles with significantly less US content made in Japan or the United Kingdom. Some lobbyists also expressed alarm that if South Korea strikes a similar deal with the US, it could become a low-cost market to assemble cars and trucks. 'They could be the new Mexico,' one lobbyist told Reuters. The American Automotive Policy Council, which represents the Detroit Three, criticised the deal, saying it creates an easier path for Japanese imports than for some cars built in North America. Even before Tuesday's deal, Detroit automotive executives raised concerns that Trump's trade policy could end up giving an edge to foreign automakers who do not invest as heavily in US manufacturing. 'This is a bonanza for our import competitors,' Ford CEO Jim Farley said in February, when Trump initially proposed levies on Mexico and Canada, but not on major automotive centres such as South Korea. The United Auto Workers union, which represents workers at the Detroit Three automakers, said it was 'deeply angered' by the deal. 'What we've seen so far makes one thing clear: American workers are once again being left behind,' the union said in a statement on Wednesday evening. The Japan trade announcement came the same day General Motors said tariff costs knocked US$1.1 billion from its bottom line, hurt by a battery of levies including 25 per cent taxes on imports from Canada and Mexico, and 50 per cent on steel and aluminum imports. Industry consultant and former GM executive Warren Browne said the Japan deal 'put all vehicles produced in Mexico and Canada by the Detroit Three at a disadvantage' because they face higher levies than Toyota vehicles shipped in from Japan, for example. That could allow the foreign brands to undercut US car companies on price. Toyota, Subaru and Mazda are among the most reliant companies on Japan-produced vehicles for their US sales, and stand to benefit most from the lower tariffs, according to business-analytics firm GlobalData. Toyota imported roughly 500,000 vehicles from Japan last year. Japanese automotive stocks soared after the trade deal announcement. Autos Drive America, which represents those Japanese automakers along with other foreign car companies operating in the United States, on Wednesday praised the trade deal, saying it would lead to further factory investment in the US The deal is good news for Wade Kawasaki, executive chairman of the Wheel Group, a collection of aftermarket wheel, tire and accessory companies based in California. Kawasaki said the group has been trying to break into some aspects of the Japanese market, and the lessening levies will help with that. 'There is a certain group of customers who want American-made products. Those are the ones we were going to get,' he said. REUTERS
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Business Standard
5 days ago
- Automotive
- Business Standard
US automakers say Trump's Japan tariff deal puts them at a disadvantage
US automakers are concerned about President Donald Trump's agreement to tariff Japanese vehicles at 15 per cent, saying they will face steeper import taxes on steel, aluminum and parts than their competitors. We need to review all the details of the agreement, but this is a deal that will charge lower tariffs on Japanese autos with no US content, said Matt Blunt, president of the American Automotive Policy Council, which represents the Big 3 American automakers, General Motors, Ford and Jeep-maker Stellantis. Blunt said in an interview the US companies and workers definitely are at a disadvantage because they face a 50 per cent tariff on steel and aluminum and a 25 per cent tariff on parts and finished vehicles, with some exceptions for products covered under the United States-Mexico-Canada Agreement that went into effect in 2020. The domestic automaker reaction reveals the challenge of enforcing policies across the world economy, showing that for all of Trump's promises there can be genuine tradeoffs from policy choices that risk serious blowback in politically important states such as Michigan and Wisconsin, where automaking is both a source of income and of identity. Trump portrayed the trade framework as a major win after announcing it on Tuesday, saying it would add hundreds of thousands of jobs to the US economy and open the Japanese economy in ways that could close a persistent trade imbalance. The agreement includes a 15 per cent tariff that replaces the 25 per cent import tax the Republican president had threatened to charge starting on Aug 1. Japan would also put together $550 billion to invest in US projects, the White House said. The framework with Japan will remove regulations that prevent American vehicles from being sold in that country, the White House has said, adding that it would be possible for vehicles built in Detroit to be shipped directly to Japan and ready to be sold. But Blunt said that foreign auto producers, including the US, Europe and South Korea, have just a 6 per cent share in Japan, raising scepticism that simply having the open market that the Trump administration says will exist in that country will be sufficient. Tough nut to crack, and I'd be very surprised if we see any meaningful market penetration in Japan, Blunt said. Major Japanese automakers Toyota, Honda and Nissan did not immediately respond to a request for comment on the trade framework, nor did Autos Drive America or the Alliance for Automotive Innovation, organisations that also represent the industry. There is the possibility that the Japanese framework would give automakers and other countries grounds for pushing for changes in the Trump administration's tariffs regime. The president has previously said that flexibility in import tax negotiations is something he values. The USMCA is up for review next year. Ford, GM and Stellantis do have every right to be upset, said Sam Fiorani, vice president at consultancy AutoForecast Solutions. But Honda, Toyota, and Nissan still import vehicles from Mexico and Canada, where the current levels of tariffs can be higher than those applied to Japanese imports. Most of the high-volume models from Japanese brands are already produced in North America. Fiorani noted that among the few exceptions are the Toyota 4Runner, the Mazda CX-5 and the Subaru Forester, but most of the other imports fill niches that are too small to warrant production in the US. There will be negotiations between the US and Canada and Mexico, and it will probably result in tariffs no higher than 15 per cent, Fiorani added, but nobody seems to be in a hurry to negotiate around the last Trump administration's free trade agreement.
Japan Today
5 days ago
- Automotive
- Japan Today
US automakers say Trump's 15% tariff deal with Japan puts them at a disadvantage
President Donald Trump greets people during a reception for Republican members of Congress in the East Room of the White House, Tuesday, July 22, 2025, in Washington. (AP Photo/Julia Demaree Nikhinson) By JOSH BOAK and ALEXA ST. JOHN U.S. automakers worry that President Donald Trump's agreement to tariff Japanese vehicles at 15% would put them at a competitive disadvantage, saying they will face steeper import taxes on steel, aluminum and parts than their competitors. 'We need to review all the details of the agreement, but this is a deal that will charge lower tariffs on Japanese autos with no U.S. content,' said Matt Blunt, president of the American Automotive Policy Council, which represents the Big 3 American automakers, General Motors, Ford and Jeep-maker Stellantis. Blunt said in an interview the U.S. companies and workers 'definitely are at a disadvantage' because they face a 50% tariff on steel and aluminum and a 25% tariff on parts and finished vehicles, with some exceptions for products covered under the United States-Mexico-Canada Agreement that went into effect in 2020. The domestic automaker reaction reveals the challenge of enforcing policies across the world economy, showing that for all of Trump's promises there can be genuine tradeoffs from policy choices that risk serious blowback in politically important states such as Michigan and Wisconsin, where automaking is both a source of income and of identity. Trump portrayed the trade framework as a major win after announcing it on Tuesday, saying it would add hundreds of thousands of jobs to the U.S. economy and open the Japanese economy in ways that could close a persistent trade imbalance. The agreement includes a 15% tariff that replaces the 25% import tax the Republican president had threatened to charge starting on Aug. 1. Japan would also put together $550 billion to invest in U.S. projects at the 'direction' of the president, the White House said. The framework with Japan will remove regulations that prevent American vehicles from being sold in that country, the White House has said, adding that it would be possible for vehicles built in Detroit to be shipped directly to Japan and ready to be sold. But Blunt said that foreign auto producers, including the U.S., Europe and South Korea, have just a 6% share in Japan, raising skepticism that simply having the open market that the Trump administration says will exist in that country will be sufficient. 'Tough nut to crack, and I'd be very surprised if we see any meaningful market penetration in Japan,' Blunt said. Asked at Wednesday's briefing about whether Trump's sectoral tariffs such as those on autos were now subject to possible change, White House press secretary Karoline Leavitt said that the issue had been going through the Commerce Department. The framework with Japan was also an indication that some nations simply saw it as preferential to have a set tariff rate rather than be whipsawed by Trump's changes on import taxes since April. But for the moment, both Japan and the United Kingdom with its quotas on auto exports might enjoy a competitive edge in the U.S. 'With this agreement in place it provides Japan with a near-term operating cost advantage compared to other foreign automakers, and even some domestic U.S. product that uses a high degree of both foreign production and parts content,' said Karl Brauer, executive analyst at iSeeCars. "It will be interesting to see if this is the first domino to fall in a series of foreign countries that decide long-term stability is more important that short term disputes over specific tariff rates.' Autos Drive America, an organization that represents major Japanese companies Toyota, Honda and Nissan and other international automakers, said in a statement that it is 'encouraged' by the announced trade framework and noted its members have exceeded domestic automaker production for the past two years. The statement urged "the Trump administration to swiftly reach similar agreements with other allies and partners, especially the European Union, South Korea, Canada and Mexico.' The Japanese framework could give automakers and other countries grounds for pushing for changes in the Trump administration's tariffs regime. The president has previously said that he values flexibility in negotiating import taxes. The USMCA is up for review next year. Ford, GM and Stellantis do 'have every right to be upset,' said Sam Fiorani, vice president at consultancy AutoForecast Solutions. But 'Honda, Toyota, and Nissan still import vehicles from Mexico and Canada, where the current levels of tariffs can be higher than those applied to Japanese imports. Most of the high-volume models from Japanese brands are already produced in North America.' Fiorani noted that among the few exceptions are the Toyota 4Runner, the Mazda CX-5 and the Subaru Forester, but most of the other imports fill niches that are too small to warrant production in the U.S. 'There will be negotiations between the U.S. and Canada and Mexico, and it will probably result in tariffs no higher than 15%,' Fiorani added, 'but nobody seems to be in a hurry to negotiate around the last Trump administration's free trade agreement.' St. John contributed from Detroit. © Copyright 2025 The Associated Press. All rights reserved. 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