Japan Auto Industry on Edge as Trump Administration Eyes New Tariffs

Japan’s automotive companies expect trade challenges because the Trump administration placed steel and aluminum tariffs internationally but kept them for Japan despite Trade Minister Muto’s diplomatic visit to Washington.

The top government official in charge of foreign affairs labeled the situation disappointing but revealed that Japan would avoid countermeasures and stick to international talks. The small percentage of exports between US and Japan leads many to fear that Japanese automobiles may face tariffs as President Trump considers them next. The Mizuho Research study indicates that if Japan faces 25% automaker import duties the country will lose 40% of export orders leading to ¥1.8 trillion ($12.2 billion) losses and halving its national output.

The head of Keidanren Masakazu Tokura accepted these duties would hurt businesses but research shows 60 percent of US car sales using Japanese brands are still produced domestically. Japanese firms must watch how President Trump handles his current delay of auto import tariffs from Mexico and Canada because these trade rules directly impact 20% of their US business.