The United States has reached a trade deal with Japan, imposing a 15% tariff on Japanese imports, including automobiles and auto parts. The agreement also includes concessions for U.S. automotive exports to Japan.
President Donald Trump hailed the deal as “massive,” claiming it will create hundreds of thousands of jobs. However, analysts paint a more nuanced picture. Some experts believe that Japanese companies may benefit more than their rivals in the short term.
Industry insiders point out that the deal has Japanese automakers paying lower tariffs on imports compared to U.S. companies, which face 25% tariffs on parts exported to the US. This could be a bad deal for US industry and auto workers, according to Matt Blunt, president of the American Automotive Policy Council.
Kelley Blue Book data shows car prices have risen only 1.2% year-over-year, far below the average 10-year increase of 3.9%. Analysts estimate that vehicles assembled in Japan will see the highest costs to consumers, with a 9% added cost, while those assembled in Mexico will face the highest tariffs at around 10%.
The deal may provide a near-term advantage for Japanese companies and allows them to plan for future investments. Foreign automakers are also “encouraged” by the news, as it provides certainty for planning greater investment and production.
Some experts argue that US businesses may thrive in the long run if North American tariffs settle at 25%, with U.S. companies potentially moving manufacturing and assembly to the US from Mexico and Canada.
Source: https://www.washingtonpost.com/business/2025/07/23/automakers-tariff-japan