U.S. automakers have expressed deep concern regarding President Donald Trump’s recent agreement to impose a 15% tariff on Japanese vehicles, arguing that this move could put American manufacturers at a competitive disadvantage.
The American Automotive Policy Council, representing major U.S. automakers including General Motors, Ford, and Jeep-maker Stellantis, has indicated that the agreement will subject U.S. companies to heavier import taxes on steel, aluminum, and parts than their Japanese competitors.
Matt Blunt, president of the council, stated, “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.”
He further highlighted the disparity in tariffs, noting that U.S. manufacturers face a staggering 50% tariff on steel and aluminum, as well as a 25% tariff on parts and finished vehicles, although some exceptions exist under the United States-Mexico-Canada Agreement (USMCA) enacted in 2020.
The reactions from domestic automakers underscore the complexities involved in enforcing international trade policies.
Blunt indicated that American companies and workers are indeed at a disadvantage, particularly in key states like Michigan and Wisconsin, where the auto industry is crucial to both the economy and local identities.
President Trump, announcing the trade agreement, proclaimed it as a significant victory that could potentially create hundreds of thousands of jobs while addressing long-standing trade imbalances with Japan.
This new framework is expected to replace a prior 25% import tax that Trump had threatened to implement. In addition, Japan has promised to invest $550 billion into U.S. projects at the president’s direction.
According to the White House, the agreement is also designed to eliminate regulatory barriers currently restricting American vehicles from being sold in Japan.
Despite these promises, Blunt remains skeptical about the potential success of expanded market access in Japan, which he notes currently only allows for a mere 6% market share for foreign auto producers from regions such as the U.S., Europe, and South Korea.
He expressed doubt that the market would see any substantial penetration as a result of the agreement, labeling it a “tough nut to crack.”
During a White House briefing, press secretary Karoline Leavitt was asked whether Trump’s sector-specific tariffs would undergo changes. She pointed out that these issues are currently being processed through the Commerce Department.
The framework with Japan suggests that many countries may prefer having a fixed tariff rate rather than being subject to fluctuating import tax changes that have characterized Trump’s policies since April.
This could potentially give both Japan and the United Kingdom a competitive advantage over certain foreign automakers in the U.S. market.
Karl Brauer, an executive analyst at iSeeCars, noted, “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. products that employ a high degree of foreign production and parts content.”
Brauer further speculated that this agreement could signal the beginning of a trend where other countries prioritize long-term stability over immediate tariff disputes.
In a supportive statement, Autos Drive America—a group representing major Japanese automakers like Toyota, Honda, and Nissan—expressed encouragement about the trade framework.
The organization emphasized that its members have surpassed domestic automaker production levels for the last two years and urged the Trump administration to quickly pursue similar agreements with other allies, notably the European Union, South Korea, Canada, and Mexico.
The Japanese agreement could potentially empower automakers from various nations to advocate for adjustments in Trump’s current tariff policies.
Trump has previously indicated that he values flexibility when it comes to negotiating import taxes.
The ongoing negotiations regarding the USMCA are set for review next year, adding another layer of complexity to the current situation.
Industry observers have noted that while Ford, GM, and Stellantis have every reason to be upset with the latest tariff agreement, Japanese automakers like Honda, Toyota, and Nissan often import vehicles from Mexico and Canada, where existing tariffs can sometimes exceed those imposed on Japanese imports.
Sam Fiorani, vice president of consultancy AutoForecast Solutions, pointed out that many high-volume models from Japanese brands are already produced within North America.
He identified only a few exceptions—such as the Toyota 4Runner, Mazda CX-5, and Subaru Forester—where manufacturing might not occur in the U.S.
Fiorani concluded, “There will be negotiations between the U.S. and Canada and Mexico, and it will probably result in tariffs no higher than 15%, but nobody seems to be in a hurry to negotiate around the last Trump administration’s free trade agreement.”
image source from：pressdemocrat
