The Staggering Effect of Trump's Tariffs: A Massive Drop in Japan's Auto Exports to the US
U.S. Auto Imports from Japan Decrease Due to Trump's Tariffs - U.S. import of Japanese cars decreases significantly due to Trump's tariffs
Let's cut to the chase: Trump's tariffs ain't no joke, man. The export numbers are down, and it's Japan that's taking the hit, especially in the auto sector. Taro Saito, the chief economist at NLI Research Institute, spills the beans, stating that automakers have been strategically slashing prices to cover the extra costs associated with tariffs. They're not about to lose their loyal American customers, am I right?
Japan, a close chum of the US, finds itself squarely under the same 10% base tariff rate that Trump's slapped onto the imports of other countries. To make things worse, cars end up with a 25% surcharge, while steel and aluminum face a whopping 50% tariff. Trump's even threatened to ramp up that general tariff rate to a whopping 24%. Yikes!
Now, here's where it gets interesting. Japan heavily leans on exports, and the auto industry accounted for a hefty 30% chunk of exports to the US last year. In Japan, the auto industry employs 8% of all workers. So, you can imagine the impact this is causing.
Japan's exports to the US have been taking a nose dive, with a steep 11% decrease in May across all sectors, according to official figures. US imports followed suit, dropping by a staggering 13.5%.
Japan's been in negotiations with the US to iron out the tariff dispute, but so far, no deals have been sealed. Prime Minister Shigeru Ishiba even had a sit-down with Trump during the G7 summit in Canada, and while he did confirm the meeting, no agreements have been established yet. He put it straight: "Since there are still differences of opinion, we haven't reached an agreement."
- US
- Donald Trump
- Japan
- Tariffs
- Car
- US President
- Tokyo
- MoF
[1] Japanese car exports to the US dropped to their lowest value in over a year, with the average unit price falling by a significant 21.7% in May 2025 compared to May 2024, despite the number of vehicles sold only decreasing by 3.9%. The yen's value remained stable during this period, indicating that currency fluctuations did not cause the price drop.
[2] The overall export value for Japan decreased for the first time in eight months in May 2025, with major automakers like Toyota absorbing the effects of the US tariffs. This suggests that the impact of the tariffs extends beyond just auto exports and affects broader trade figures.
[1] Despite a slight decrease in the number of cars exported from Japan to the United States, the average price of these vehicles dropped significantly by 21.7% in May 2025 compared to the previous year. This price drop was not as a result of currency fluctuations, as the value of the yen remained stable during this period, but was instead an effort by Japanese automakers such as Toyota to cover the additional costs associated with President Trump's tariffs.
[2] The adverse effects of the tariffs imposed by President Trump were reflected not only in Japan's auto exports but also in the country's overall trade figures. In May 2025, Japan experienced its first decrease in overall export value in eight months, indicating that the tariffs had an impact that went beyond just the auto sector.
