Latest news with #NorthAmerican-built
CNBC
6 days ago
- Automotive
- CNBC
Trump Commerce Sec. Lutnick says U.S. auto CEOs are 'cool with' higher tariffs than Japan
Commerce Secretary Howard Lutnick said Thursday that American auto CEOs told him they are "cool with" President Donald Trump's new trade deal, which could put lower tariffs on cars imported from Japan than on cars made by U.S. companies in Canada and Mexico. Lutnick brushed off complaints from a group representing General Motors, Ford and Stellantis that Trump's plan could give Japanese automakers an advantage over the "Big Three" Detroit car companies. "Oh my God, that's just so silly," Lutnick said on CNBC's "Squawk on the Street" after being asked about criticism by the American Automotive Policy Council. Trump on Tuesday announced an agreement that would see Japan accept a tariff of 15% on cars it exports to the U.S., in addition to pledging $550 billion in U.S. investments. But American auto companies will be on the hook for that 25% levy on cars they make in Canada and Mexico and import into the U.S. under tariffs imposed by Trump in April. Shares of Japanese auto brands Toyota, Honda, Nissan and Mazda soared on news of Trump's trade deal with Japan — but U.S. carmakers sounded alarms. "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," said Matt Blunt, head of the American Automotive Policy Council, on Tuesday. Lutnick on Thursday told CNBC that "PR people" are "ginning up" discontent over the deal, and that the CEOs whose companies are represented by the group do not oppose the pact. "They are cool with it," Lutnick said, after noting he had spoken to the American car CEOs earlier Thursday. He said he understood that U.S. companies would be "a little bummed out" to see tariffs on imports of Japanese-built autos fall from 25% to 15%. But Luntnick said domestic auto companies could avoid paying tariffs on cars they build in Canada and Mexico by moving their manufacturing facilities to the United States. "Come on, there's no tariff if you build it in America," he said. "American manufacturers are going to do extremely well in America — as long as they build it in America. You build it in America, you're good," he said. Blunt did not immediately respond to CNBC's request for comment on Lutnick's remarks. Trump's tariffs have already taken a toll on the Big Three automakers. GM in May issued full-year guidance that included a $4 billion to $5 billion hit from tariffs. The company confirmed this week that tariffs cost it $1.1 billion in the second fiscal quarter of 2025. Stellantis on Monday said that it expects a nearly $2.7 billion net loss in the first half of the year, which is partly due to the effects of the tariffs.
Hindustan Times
6 days ago
- Business
- Hindustan Times
Trump's New Trade Standard Takes Shape With 15% Tariff Deal
President Trump's push to introduce a new standard for global trade is coming into sharper focus as U.S. and EU officials converge on a possible 15% tariff deal, which could come on the heels of a similar agreement with Japan . Taken together, the two developments represent a turning point in months of global trade negotiations that have stoked uncertainty among investors and America's biggest trading partners. Much remains unsettled one week before President Trump's self-imposed Aug. 1 deadline for reaching trade deals with other countries. Deals with two of the U.S.'s largest trading partners, Canada and Mexico, haven't been reached and those countries face getting slapped with 35% and 30% tariffs, respectively, if deals aren't struck before next week. Tariffs of 25% currently apply to both countries, with exemptions for certain products. A 90-day truce with Beijing has already brought additional tariffs on Chinese exports to the U.S. this year down to 30%, an amount that includes 10% levies on all U.S. imports. Tariffs on the country could soar again on Aug. 12. The developments with Japan and the EU offer some clarity to businesses and the global economy after months of turmoil. Businesses have held back on major investments and decisions amid Trump's back-and-forth tariff announcements and uncertainty over whether countries could reach trade deals with his administration. 'When you have these framework agreements, that takes the risk of more damaging tit-for-tat trade wars off the table,' said Brett Ryan, senior U.S. economist at Deutsche Bank. The 15% levy on goods for the most part represents the highest tariff level on Japan in decades, and is higher than the 10% on most U.S. imports Trump implemented starting April 5. But in a sign of how much expectations have changed, markets seemed to welcome the news—an acknowledgment that the rate isn't as severe as the 25% he had threatened. Still, the higher tariffs are set to push up prices of goods for U.S. consumers, say economists. That could weigh on a domestic economy that so far has shown resilience amid Trump's trade wars. A ceremony Saturday at the World Expo in Osaka, Japan. Fifteen percent 'is a huge number for tariffs. If that is what we see for other countries, we're in a new and costlier world,' said Gene M. Grossman, international economics professor at Princeton University. The 15% on Japanese autos represents a reduction from the 25% tariff Trump put in place for most car and car parts coming into the U.S. American automakers hope that similar tariff reductions will follow for their vehicles and auto parts imported from Canada and Mexico, which currently face 25%, with exemptions depending on the origins of the components. The U.S. automotive industry criticized the 15% tariffs as giving Japanese automakers an unfair advantage. '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,' said Matt Blunt, head of the American Automotive Policy Council, on Wednesday. The body represents GM, Ford and Stellantis. Thomas Simons, chief U.S. economist at Jefferies investment bank, said even 15% tariffs will likely result in more expensive cars for American consumers. The fate of the automotive sector has been a sticking point in U.S.-EU trade discussions, with the bloc trying to secure relief from the U.S.'s current 25% tariffs on the sector. From left, European Council President António Costa, Japanese Prime Minister Shigeru Ishiba and European Commission President Ursula von der Leyen at a press conference in Tokyo on Wednesday. European officials expect that a potential deal with the U.S. would apply a 15% baseline tariff as a flat rate for most EU exports to the U.S., said people familiar with their thinking. That amount wouldn't be added on top of levies that existed before Trump started raising tariffs this year. That is different from the U.S.'s current 10% blanket tariff, which was layered on top of existing tariffs. As a result, the 15% tariff rate currently being discussed wouldn't be much higher, on average, than the actual level the EU currently faces, the people said. The 15% baseline tariff would apply to cars, though it is not expected to apply to steel and aluminum, which currently face 50% tariffs. EU officials are discussing those terms as part of a potential deal with their U.S. counterparts, who appear to be on board with the 15% level, the people said. But they emphasized that a deal wasn't certain and any agreement would need President Trump's signoff. The U.S. and EU have also discussed creating exemptions from the baseline tariff for certain sectors, including aircraft, the people said. Trump appeared to suggest on Wednesday that he was open to a deal with the EU that could be similar to Japan's. After touting the agreement with Japan, he said the U.S. plans to put a simple tariff on countries that will range from 15% to 50%. 'We've offered such a deal to the European Union,' Trump said, without referencing Japan directly. 'We're in serious negotiations, and if they agree to open up the union to American businesses, then we will let them pay a lower tariff.' A White House spokesman said any discussion of possible deals should be considered speculation unless announced by Trump. The EU had thought it was close to a deal with the U.S. several weeks ago that would have put baseline tariffs at 10%, with some sectors exempted. But that was thrown into question when Trump posted a letter threatening to impose 30% tariffs on the bloc beginning Aug. 1. Since then, the EU has continued talks with the U.S. Officials told the EU's trade chief, Maros Sefcovic, last week that they expected Trump to demand a baseline tariff of 15% or more to get an agreement. After the Japan deal was announced, it became easier for European officials to accept the idea that they might also have 15% baseline tariffs, people familiar with their thinking said. The Japan deal represented a signal that 15% is the level that could be established for most major U.S. trading partners. The bloc is also continuing to prepare countermeasures against the U.S. in case a deal can't be reached. Member states on Thursday are expected to approve a package of potential tariffs on U.S. goods worth more than $100 billion, in a sign that the bloc doesn't view its hoped-for agreement with the U.S. as a done deal. Those tariffs wouldn't take effect before Aug. 7. The deal agreed upon by Japan and the U.S. also contains a novel financial commitment that the administration says will involve Japanese banks and financial institutions contributing $550 billion to a fund that the administration can then direct to infrastructure projects of its choice. 'The Japanese are going to give America the ability to choose the projects, decide the projects and execute the projects,' Commerce Secretary Howard Lutnick said Wednesday on Bloomberg TV. 'The Japanese will finance the project and then we'll give it to an operator who will run it and the profits will be split—90% to the taxpayers of the [U.S.] and 10% to the Japanese.' It remains unclear how the investment fund would be structured. Japanese Prime Minister Shigeru Ishiba said that it would consist of loan investments and guarantees, but Lutnick said it would also involve equity. 'The Japanese are the financier, the banker,' he said on Bloomberg. Republican senators briefed on the deal praised the new investment fund as a way to deliver on critical national-security investments like semiconductors, minerals and energy production. 'It's a structure that I haven't seen before,' said Sen. Bill Hagerty, Trump's first-term ambassador to Japan. 'They're going to put a massive financing package together. So it's not foreign investment, it's a financing package, and we will pick the best [projects], and we'll let people compete for these projects.' Democrats said they are skeptical of a pot of money that some labeled a 'slush fund' that they fear will be spent on political priorities favored by Trump, and not only strategic projects. Earlier Tuesday, the U.S. also reached a pact with the Philippines and gave details on its trade framework with Indonesia, building on an initial announcement last week. Write to Chao Deng at Kim Mackrael at and Gavin Bade at Trump's New Trade Standard Takes Shape With 15% Tariff Deal
Mint
7 days ago
- Business
- Mint
Trump's new trade standard takes shape with 15% tariff deal
President Trump's push to introduce a new standard for global trade is coming into sharper focus as U.S. and EU officials converge on a possible 15% tariff deal, which could come on the heels of a similar agreement with Japan. Taken together, the two developments represent a turning point in months of global trade negotiations that have stoked uncertainty among investors and America's biggest trading partners. Much remains unsettled one week before President Trump's self-imposed Aug. 1 deadline for reaching trade deals with other countries. Deals with two of the U.S.'s largest trading partners, Canada and Mexico, haven't been reached and those countries face getting slapped with 35% and 30% tariffs, respectively, if deals aren't struck before next week. Tariffs of 25% currently apply to both countries, with exemptions for certain products. A 90-day truce with Beijing has already brought additional tariffs on Chinese exports to the U.S. this year down to 30%, an amount that includes 10% levies on all U.S. imports. Tariffs on the country could soar again on Aug. 12. The developments with Japan and the EU offer some clarity to businesses and the global economy after months of turmoil. Businesses have held back on major investments and decisions amid Trump's back-and-forth tariff announcements and uncertainty over whether countries could reach trade deals with his administration. 'When you have these framework agreements, that takes the risk of more damaging tit-for-tat trade wars off the table," said Brett Ryan, senior U.S. economist at Deutsche Bank. The 15% levy on goods for the most part represents the highest tariff level on Japan in decades, and is higher than the 10% on most U.S. imports Trump implemented starting April 5. But in a sign of how much expectations have changed, markets seemed to welcome the news—an acknowledgment that the rate isn't as severe as the 25% he had threatened. Still, the higher tariffs are set to push up prices of goods for U.S. consumers, say economists. That could weigh on a domestic economy that so far has shown resilience amid Trump's trade wars. A ceremony Saturday at the World Expo in Osaka, Japan. Fifteen percent 'is a huge number for tariffs. If that is what we see for other countries, we're in a new and costlier world," said Gene M. Grossman, international economics professor at Princeton University. The 15% on Japanese autos represents a reduction from the 25% tariff Trump put in place for most car and car parts coming into the U.S. American automakers hope that similar tariff reductions will follow for their vehicles and auto parts imported from Canada and Mexico, which currently face 25%, with exemptions depending on the origins of the components. The U.S. automotive industry criticized the 15% tariffs as giving Japanese automakers an unfair advantage. '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," said Matt Blunt, head of the American Automotive Policy Council, on Wednesday. The body represents GM, Ford and Stellantis. Thomas Simons, chief U.S. economist at Jefferies investment bank, said even 15% tariffs will likely result in more expensive cars for American consumers. The fate of the automotive sector has been a sticking point in U.S.-EU trade discussions, with the bloc trying to secure relief from the U.S.'s current 25% tariffs on the sector. From left, European Council President António Costa, Japanese Prime Minister Shigeru Ishiba and European Commission President Ursula von der Leyen at a press conference in Tokyo on Wednesday. European officials expect that a potential deal with the U.S. would apply a 15% baseline tariff as a flat rate for most EU exports to the U.S., said people familiar with their thinking. That amount wouldn't be added on top of levies that existed before Trump started raising tariffs this year. That is different from the U.S.'s current 10% blanket tariff, which was layered on top of existing tariffs. As a result, the 15% tariff rate currently being discussed wouldn't be much higher, on average, than the actual level the EU currently faces, the people said. The 15% baseline tariff would apply to cars, though it is not expected to apply to steel and aluminum, which currently face 50% tariffs. EU officials are discussing those terms as part of a potential deal with their U.S. counterparts, who appear to be on board with the 15% level, the people said. But they emphasized that a deal wasn't certain and any agreement would need President Trump's signoff. The U.S. and EU have also discussed creating exemptions from the baseline tariff for certain sectors, including aircraft, the people said. Trump appeared to suggest on Wednesday that he was open to a deal with the EU that could be similar to Japan's. After touting the agreement with Japan, he said the U.S. plans to put a simple tariff on countries that will range from 15% to 50%. 'We've offered such a deal to the European Union," Trump said, without referencing Japan directly. 'We're in serious negotiations, and if they agree to open up the union to American businesses, then we will let them pay a lower tariff." A White House spokesman said any discussion of possible deals should be considered speculation unless announced by Trump. The EU had thought it was close to a deal with the U.S. several weeks ago that would have put baseline tariffs at 10%, with some sectors exempted. But that was thrown into question when Trump posted a letter threatening to impose 30% tariffs on the bloc beginning Aug. 1. Since then, the EU has continued talks with the U.S. Officials told the EU's trade chief, Maros Sefcovic, last week that they expected Trump to demand a baseline tariff of 15% or more to get an agreement. After the Japan deal was announced, it became easier for European officials to accept the idea that they might also have 15% baseline tariffs, people familiar with their thinking said. The Japan deal represented a signal that 15% is the level that could be established for most major U.S. trading partners. The bloc is also continuing to prepare countermeasures against the U.S. in case a deal can't be reached. Member states on Thursday are expected to approve a package of potential tariffs on U.S. goods worth more than $100 billion, in a sign that the bloc doesn't view its hoped-for agreement with the U.S. as a done deal. Those tariffs wouldn't take effect before Aug. 7. The deal agreed upon by Japan and the U.S. also contains a novel financial commitment that the administration says will involve Japanese banks and financial institutions contributing $550 billion to a fund that the administration can then direct to infrastructure projects of its choice. 'The Japanese are going to give America the ability to choose the projects, decide the projects and execute the projects," Commerce Secretary Howard Lutnick said Wednesday on Bloomberg TV. 'The Japanese will finance the project and then we'll give it to an operator who will run it and the profits will be split—90% to the taxpayers of the [U.S.] and 10% to the Japanese." It remains unclear how the investment fund would be structured. Japanese Prime Minister Shigeru Ishiba said that it would consist of loan investments and guarantees, but Lutnick said it would also involve equity. 'The Japanese are the financier, the banker," he said on Bloomberg. Republican senators briefed on the deal praised the new investment fund as a way to deliver on critical national-security investments like semiconductors, minerals and energy production. 'It's a structure that I haven't seen before," said Sen. Bill Hagerty, Trump's first-term ambassador to Japan. 'They're going to put a massive financing package together. So it's not foreign investment, it's a financing package, and we will pick the best [projects], and we'll let people compete for these projects." Democrats said they are skeptical of a pot of money that some labeled a 'slush fund" that they fear will be spent on political priorities favored by Trump, and not only strategic projects. Earlier Tuesday, the U.S. also reached a pact with the Philippines and gave details on its trade framework with Indonesia, building on an initial announcement last week. Write to Chao Deng at Kim Mackrael at and Gavin Bade at
Axios
7 days ago
- Automotive
- Axios
U.S. automakers find little to cheer in Japan trade deal
U.S. automakers may not sell a lot of cars in Japan, even after a new trade pact between the two countries — but they're definitely worried about how the deal might disadvantage them at home. Why it matters: President Trump's promise to strengthen the U.S. auto sector often runs counter to his trade and policy actions, leaving automakers feeling frustrated and confused. Driving the news: The trade deal announced by the president includes a 15% "reciprocal" tariff on goods imported from Japan and $550 billion of Japanese investments in the U.S. "Perhaps most importantly," the president wrote on Truth Social, "Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things." Reality check: Unfair tariffs are not what has prevented U.S. automakers from selling more cars in Japan, says S&P Global Mobility analyst Stephanie Brinley. "Japan hasn't had a tariff on imported vehicles," she tells Axios. The bigger problem is that American automakers don't produce the small cars that Japanese consumers prefer. It's also a right-hand-drive market, which requires extra engineering. Safety and emissions standards are different in Japan, too. In an interview with Bloomberg, Commerce Secretary Howard Lutnick said Japan will "take U.S. cars based on U.S. standards, so you don't have to make a different car" for the Japanese market. "You can take the car you make in Detroit, put it on a boat and send it," he said. But whether anyone in Tokyo will buy a Ford F-150 remains an open question. Zoom in: In the U.S. market, the new 15% tariff rate on Japanese cars will be lowered from the 25% Trump imposed on all imported vehicles earlier this year. But it's sharply higher than the 2.5% that Japanese carmakers had been paying before Trump took office. Between the lines: Trump has shifted trade war psychology, as Axios Macro authors Neil Irwin and Courtenay Brown noted. When a 25% tariff is on the table, striking a deal at 15% brings a collective sigh of relief to both investors and manufacturers. Japanese carmakers are signaling that they see it as a positive step that will remove uncertainty. Yes, but: It's American carmakers who are most upset. "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," said Matt Blunt, head of the American Automotive Policy Council, which represents General Motors, Ford and Stellantis. What to watch: All automakers, including Japanese players, are anxious to see how the administration updates the U.S.-Mexico-Canada-Agreement. The administration is also negotiating deals with South Korea and the European Union that will be critical for automakers, not just for Korean or European brands. GM imported 419,000 vehicles from South Korea in 2024, including key models like the Chevrolet Trax and Trailblazer.
Yahoo
7 days ago
- Automotive
- Yahoo
Toyota, Honda, Nissan stocks soar on trade pact as Big 3 say it's a 'bad deal'
Toyota (TM), Honda (HMC), and Nissan (NSNHF) stocks surged on Wednesday morning on confirmation that the Trump administration and Japanese government struck a trade deal. 'We just completed a massive Deal with Japan, perhaps the largest Deal ever made,' President Trump announced on Truth Social on Tuesday night. Trump added Japan would pay a 'reciprocal' tariff on imports of 15%, as well as invest $550 billion into the US 'at my direction,' Trump said, without further elaboration. Per Reuters, Japan's Prime Minister Shigeru Ishiba confirmed that auto tariffs will be lowered to 15% from the current 25% auto sector tariffs as part of the deal. By comparison, prior to Trump's imposition of sector auto tariffs, Japanese car imports were subject to only 2.5% tariffs. Read more: The latest news and updates on Trump's tariffs Despite this, clarity on a trade deal and a 'reduction' in auto tariffs of essentially 10% have Japanese automaker stocks soaring, with US-listed Honda shares hitting a new 52-week high. Spokespersons for Honda and Nissan did not immediately respond when reached for comment. A Toyota spokesperson said the company had no official comment at this time. The deal is a big accomplishment of the Japanese government and Ishiba, as automobile exports to the US make up nearly 30% of Japan's global auto exports, with the auto sector in general a significant part of the Japanese economy. While news of a trade deal with Japan is boosting the auto sector at large on hopes of trade deals with other countries, Detroit's Big Three automakers — General Motors (GM), Ford (F), and Stellantis (STLA) — aren't pleased. 'Any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles with high US content is a bad deal for US industry and US auto workers,' Matt Blunt of the American Automotive Policy Council (AAPC), a trade group representing the Big Three, said to Automotive News. Read more: What Trump's tariffs mean for the economy and your wallet Blunt and the AAPC argue that autos compliant with the United States-Mexico-Canada Agreement (USMCA) that are made in Canada and Mexico, where the Big Three have large operations, currently face 25% auto sector tariffs, with certain exclusions given for USMCA-compliant parts. In addition, auto parts made in the two countries face 25% tariffs. In addition, Trump threatened to hike tariffs on Mexico to 30% and Canada to 35% on Aug. 1, though it is unclear if those heightened duties would affect autos. Ford CEO Jim Farley has argued in the past that if Trump strikes a similar deal with Korea, for example, it would again reward those automakers who make only some of their vehicles in the US and North America and punish domestic automakers who build in Mexico and Canada. Ford and Farley will give investors an updated statement on the tariff situation when the company reports second quarter earnings on July 30. On Tuesday GM reported Q2 earnings took a $1.1 billion hit due to Trump's tariffs, and Stellantis revealed on Monday that it lost $2.7 billion in the first half of the year due to a combination of lagging sales and tariffs. Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram. 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
