Detroit car manufacturer rejected Trump-Japan trade agreements

Detroit car manufacturer rejected Trump-Japan trade agreements

The trading group, which represents the traditional Big Three US car manufacturer, has expressed concerns about the United States trade agreement with Japan. In their opinion, it disadvantages the American automobile manufacturers and partial suppliers.

Details of the trade agreement

The trade agreement announced on Tuesday by the Trump administration provides 15% tariffs on imports from Japan, including cars and car parts. The American automobile manufacturers argue that this gives Japanese imports an unfair advantage over other imported vehicles. This also includes cars that are assembled by US companies in Mexico and Canada with a high proportion of US parts. Most imported cars-including the American vehicles that are manufactured outside the United States-are subject to a basic customs set of 25%.

reactions of the automotive industry

"The American automobile manufacturers still have to check the details of the US Japan Agreement, but every deal that can almost no longer use the tariffs built in North America to Japanese imports with no US content than the tariffs with high US content," explained Matt Blunt, President of American Automotive Policy Council (AAPC), which General Motors, Ford and Stellantis (parent company of Jeep, Ram, Dodge and Chrysler) represents.

Blunt informed CNN on Wednesday that the car manufacturers expressed their concerns about the Japan Agreement with the Trump administration, as well as the trade frame with the United Kingdom, which lowered the tariffs to some luxury cars that were produced in England-including Rolls Royce, Bentleys, Land Rovers, Jaguars.

"We said at the time that we did not want this to serve as a precedent for other trade agreements," he added.

import numbers and production locations

Japan exported 1.3 million cars to the United States last year, which is about 8% of the US market, according to data from S&P Global Mobility. That is about half of the 2.5 million vehicles that were imported from Mexico, but a little more than 1.1 million from Canada.

The Japanese car manufacturers, however, produce most vehicles they sell in the United States in North America. Together they built 3.3 million cars in US works, which is much more than the vehicles made in Japan.

In contrast, car systems in Canada and Mexico use far more parts produced from the USA than the vehicles in Japanese. According to the data of the Ministry of Commerce, US car suppliers delivered parts worth $ 35.8 billion to Mexico in 2024 and $ 28.4 billion to Canada, but only $ 1.5 billion to Japan.

In addition, US car suppliers employ more than 500,000 Americans, which are almost twice as many workers as in US car systems, according to the data of the Ministry of Labor.

US exports according to Japan

The United States, like most countries, have almost no auto exports to Japan. Only 6% of the cars sold in Japan come from abroad, said Blunt. "Japan is one of the most sealed off the world," he said.

President Donald Trump published on Wednesday on his social platform that “Japan is opening his market for the USA for the first time, also for cars, SUVs, trucks.”

Blunt does not see that this will happen in the near future. "We will certainly share the goal of the President of opening closed markets for US exports, but Japan will be a very hard nut," he added.

challenges for the US car market in Japan

Japan does not raise tariffs on the relatively limited number of US cars that imports it, but Blunt realizes that there are numerous technical hurdles. For example, the Japanese certification processes differ from the US specifications, the possibilities for dealers are limited and Japanese buyers prefer Japanese cars. The American automobile manufacturers have also largely turned away from the small vehicle segment, which is central to the Japanese car market.

"If we think about markets that offer real opportunities for stronger US exports, I don't think Japan is often on this list," said Blunt.

outlook on the Japanese car market

Justin Wolfers, professor of economy at the University of Michigan, also questioned how many American cars that Japanese will ultimately buy. "The basic problem is that the cars in Tokyo are small and the streets are tight. They do not drive American cars because they do not meet Japan's needs," said Wolfers.

These challenges illustrate how difficult it will be for the American automotive industry to gain a foothold in the Japanese market.