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American government poses steep tariffs against Japan, potentially inflicting billions in losses upon OEMs (Original Equipment Manufacturers)

Potential financial losses for Japanese automakers at stake due to potential US tariffs, as the clock ticks for negotiation deadlines.

,   and  Administrator
2 min read
American government poses taxes on Japanese manufacturers, potential losses estimated in billions...
American government poses taxes on Japanese manufacturers, potential losses estimated in billions of dollars for OEMs

American government poses steep tariffs against Japan, potentially inflicting billions in losses upon OEMs (Original Equipment Manufacturers)

The US administration has announced a series of trade-related actions, including the "Liberation Day" tariffs, which were initially announced by former President Donald Trump. These tariffs, if enforced next week, will have significant implications for the automotive industry, particularly in Japan.

The "Liberation Day" tariffs are not just a single tariff but a set of tariffs, including a 50% tariff on steel and aluminium, and an additional 25% import duty on all vehicles and parts. If enforced, these tariffs will impact multiple countries, including Japan.

The tariffs are referred to as "reciprocal" tariffs, meaning they are in response to tariffs imposed by other countries. The new threat against Japan is higher than the 24% duty Trump suggested for the country during the "Liberation Day" tariffs announced in April.

The decline in exports from Japanese carmakers to the US and North America is resulting in a financial hit for the OEMs. Companies such as Mitsubishi Motors, Mazda, and Subaru, which remain under significant pressure despite the tariff reduction to 15%, could face steep importing costs. Larger manufacturers like Toyota and Honda benefit from some relief but may need to deepen collaborations with bigger partners to offset the impact.

Recent financial results from Japanese carmakers show a decline in exports from Japan to the US and North America compared to 2024. This decline is likely to worsen if the tariffs are enforced next week.

If a deal is not brokered before 9 July, the "Liberation Day" tariffs, as of now, could be applied across multiple countries, potentially resulting in sweeping tariffs or higher across countries currently subject to a 10% global tariff by the US.

The US President Donald Trump has also threatened tariffs of up to 35% on Japan, which, if enforced, would further increase the financial strain on Japanese automakers. The tariffs are expected to be imposed unless a deal is brokered before the deadline.

These tariffs could have far-reaching implications for the global automotive industry, particularly in the US and Japan. It is a developing story, and we will continue to monitor the situation closely.

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