US automakers say Trump’s 15% tariff deal with Japan puts them at a disadvantage

WASHINGTON AP U S automakers are concerned about President Donald Trump s agreement to tariff Japanese vehicles at saying they will face steeper import taxes on steel aluminum and parts than their competitors We need to review all the details of the agreement but this is a deal that will charge lower tariffs on Japanese autos with no U S content announced Matt Blunt president of the American Automotive Approach Council which represents the Big American automakers General Motors Ford and Jeep-maker Stellantis Blunt noted in an interview the U S companies and workers definitely are at a disadvantage because they face a tariff on steel and aluminum and a tariff on parts and finished vehicles with particular exceptions for products covered under the United States-Mexico-Canada Agreement that went into effect in The domestic automaker reaction reveals the challenge of enforcing policies across the world business sector showing that for all of Trump s promises there can be genuine tradeoffs from protocol choices that threat serious blowback in politically essential states such as Michigan and Wisconsin where automaking is both a source of income and of identity Trump portrayed the exchange framework as a major win after announcing it on Tuesday saying it would add hundreds of thousands of jobs to the U S economic system and open the Japanese financial sector in approaches that could close a persistent business imbalance The agreement includes a tariff that replaces the import tax the Republican president had threatened to charge starting on Aug Japan would also put together billion to invest in U S projects the White House noted The framework with Japan will remove regulations that prevent American vehicles from being sold in that country the White House has revealed adding that it would be practicable for vehicles built in Detroit to be shipped directly to Japan and ready to be sold But Blunt declared that foreign auto producers including the U S Europe and South Korea have just a share in Japan raising skepticism that purely having the open region that the Trump administration says will exist in that country will be sufficient Tough nut to crack and I d be very surprised if we see any meaningful arena penetration in Japan Blunt noted Petitioned at Wednesday s briefing about whether Trump s sectoral tariffs such as those on autos were now subject to practicable change White House press secretary Karoline Leavitt announced that the issue had been going through the Commerce Department The framework with Japan was also an indication that various nations only saw it as preferential to have a set tariff rate rather than be whipsawed by Trump s changes on import taxes since April But for the moment both Japan and the United Kingdom with its quotas on auto exports might enjoy a competitive edge in the U S With this agreement in place it provides Japan with a near-term operating cost advantage compared to other foreign automakers and even several domestic U S product that uses a high degree of both foreign production and parts content reported Karl Brauer executive analyst at iSeeCars It will be engaging to see if this is the first domino to fall in a series of foreign countries that decide long-term stability is more fundamental that short term disputes over specific tariff rates Major Japanese automakers Toyota Honda and Nissan did not directly respond to a request for comment on the arrangement framework nor did Autos Drive America or the Alliance for Automotive Innovation organizations that also represent the industry There is the possibility that the Japanese framework would give automakers and other countries grounds for pushing for changes in the Trump administration s tariffs regime The president has previously disclosed that flexibility in import tax negotiations is something he values The USMCA is up for review next year Ford GM and Stellantis do have every right to be upset revealed Sam Fiorani vice president at consultancy AutoForecast Solutions But Honda Toyota and Nissan still import vehicles from Mexico and Canada where the current levels of tariffs can be higher than those applied to Japanese imports The bulk of the high-volume models from Japanese brands are already produced in North America Fiorani noted that among the scant exceptions are the Toyota Runner the Mazda CX- and the Subaru Forester but the bulk of the other imports fill niches that are too small to warrant production in the U S There will be negotiations between the U S and Canada and Mexico and it will likely development in tariffs no higher than Fiorani added but nobody seems to be in a hurry to negotiate around the last Trump administration s free exchange agreement St John contributed from Detroit Source