by Japan and US Agree on Lowering Customs Tariffs
Japan and the United States have signed a trade deal that lowers tariffs on the export of Japanese cars to America from 25% to 15%. This news caused a jump in the shares of Japanese automakers: Toyota rose by 15%, and Mazda by 17%. However, Detroit automakers are outraged because their cars, which are manufactured in Mexico and Canada, may face higher tariffs.
US President Donald Trump is threatening to increase tariffs on goods from Mexico to 30%, and from Canada to 35% starting August 1st. The White House called the deal with Japan a “historic victory,” as they believe it will remove barriers to selling American cars in Japan. However, experts note that the flow of cars from Japan to the US is significantly greater than in the opposite direction.
Detroit manufacturers stated: “Any deal that sets lower tariffs for Japanese imports with minimal American content than for vehicles from North America is bad for American industry and workers.”
Implications for the Global Auto Market
GM reported that tariffs have already impacted its profits in the second quarter of 2025 and could cost it up to $5 billion by the end of the year. The situation is complicated after the UK agreed on a 10% tariff for its goods. European automakers are also trying to reach a deal with the US, but negotiations have not yielded results so far.
These events indicate growing tensions in international trade, especially in the automotive industry. The dynamics of US tariff policy could significantly impact global supply chains and the competitiveness of manufacturers in different regions of the world. Further decisions by the Trump administration could further escalate the situation, especially for companies that rely on production in Mexico and Canada.
