US President Donald Trump’s lowered 15 per cent tariff on automobiles from Japan took effect Tuesday about five months after his aggressive trade approach began to take a toll on the industrial backbone of one of Washington’s key allies.
After Trump imposed an additional auto tariff on national security grounds in April, the US tariff rate for foreign-origin cars rose from 2.5 per cent to 27.5 per cent, squeezing the margins of Japanese automakers and other manufacturers.
The reduced tariff is part of a trade deal the Trump administration struck on 22 July with Japan, which in return has committed to investing massively in the United States and increasing imports of American agricultural products during the president’s nonconsecutive second term. Although implementing the lowered tariff will ease the impact on Japan’s automotive sector, the 15 per cent rate is still much higher than before and continues to burden carmakers and related industries.
As agreed upon by the two countries, the additional 25 per cent tariff imposed by Trump in May on major auto parts, including engines and transmissions, was cut to 15 per cent for parts coming from Japan.
In 2024, Japan exported around six trillion yen ($41 billion) worth of vehicles to the United States. Together with auto-parts exports, they accounted for one-third of Japan’s total shipments to the world’s largest economy, according to Japanese trade data.
Kyodo
#GlobalNewLightOfMyanmar