President Donald Trump’s “massive” trade deal with Japan is buoying foreign carmakers — and alarming American car companies who fear they are now at a disadvantage.
Trump imposed a 25 percent tariff on all foreign auto manufacturers in early April, a duty that also applies to cars made by U.S. companies from parts imported from Mexico and Canada. But now, the president is planning to lower the tariff to 15 percent for Japanese autos and auto parts, the White House confirmed Wednesday. That means some cars manufactured by U.S. companies could end up facing higher duties than some cars built entirely overseas.
The new deal with Tokyo suggests there is a path forward to lowering the auto duties, an issue that has bedeviled trade talks with other major trading partners like the European Union and South Korea. And it’s causing angst for U.S. automakers, who warn that it would hurt domestic industry due to the complex North American auto supply chain.
“American Automakers still need to review the details of the U.S.-Japan agreement, but any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than it does North American-built vehicles with high U.S. content is a bad deal for the U.S. industry and U.S. auto workers,” said Matt Blunt, president of the American Automotive Policy Council, which represents the American companies Ford, General Motors and Stellantis.
