US Tariffs Slash $19B From Japan’s Auto Giants—Who’s Really Paying?
Tokyo’s automakers brace for impact as protectionist policies hit bottom lines. The irony? American consumers will foot the bill—as usual.
Subheader: The math doesn’t lie
Every 25% tariff translates to ¥2,100 extra per vehicle. Guess where that markup’s headed? Hint: not executive bonuses.
Closer: While lobbyists duel in DC, crypto traders smirk—at least blockchain doesn’t charge customs fees.
Automakers are putting their hopes on trade talks
Negotiations between Tokyo and Washington are expected to speed up later this month, and Prime Minister Shigeru Ishiba has pledged not to sign any deal that fails to tackle auto duties, a sector he calls vital to the nation’s economy. While they wait, companies are already changing course.
Honda this week delayed by two years a C$15 billion ($11 billion) plan to set up an electric-vehicle supply chain in Canada, which WOULD have included a plant able to turn out 240,000 cars a year. The firm has begun moving production of the hybrid Civic from Japan to the United States as well. Around 40 percent of the 1.4 million cars Honda sold in America in 2024 were imported, Bloomberg Intelligence data show.
Subaru says all spending plans, including programs to develop electric vehicles, are now under review. Nissan has paused U.S. orders for sport-utility vehicles built in Mexico, and Mazda is ending shipments to Canada of one model made at the Alabama joint venture it runs with Toyota.
Toyota for its part has kept production steady so far. Chief Executive Koji Sato told reporters last week that the group will look at raising U.S. output over the medium to long term rather than making sudden moves.
The levy is especially hard on Nissan, which is already fighting its worst crisis in 25 years. Management has announced 20,000 job cuts and the closure of seven plants worldwide. Even with those DEEP cuts, the company still needs fresh cash after merger talks with Honda failed earlier this year.
“Nissan’s plight could have been minimized if it had taken these steps sooner,” said Bloomberg Intelligence senior auto analyst Tatsuo Yoshida. “The impact of these measures, compared to what other carmakers are doing or even what Nissan has done in the past, is unclear.”
Analysts warn that every month of uncertainty risks slowing new investment, eroding skilled jobs, and pushing research funds toward regions that still trade freely with few policy shocks or barriers.
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