Japanese automakers warn of US tariff impact

TOKYO: Japan’s top automakers on Wednesday said they may be forced to cut production if US President Donald Trump goes ahead with his planned tariffs on vehicle imports.

The auto industry is a huge pillar of the Japanese economy, with about 10 per cent of jobs there connected to the sector. Japan’s Toyota is the world’s top-selling carmaker.

Masanori Katayama, chair of the Japan Automobile Manufacturers Association (JAMA), warned of the impact of US trade protectionism at a Tokyo press conference.

“We are concerned that the additional 25 per cent tariff on automobiles, currently being considered by the Trump administration, if applied to exporters from Japan, Mexico and Canada, would have a negative impact overall on the economies of the United States and Japan,” he said.

“If it happens, considerable production adjustments” may occur, said Katayama, who is also chief executive of truck producer Isuzu Motors. Vehicles accounted for roughly a third of Japan’s 21.3 trillion yen ($142 billion) of US-bound exports in 2024.

Ministers have been lobbying their US counterparts to secure tariff exemptions for Japanese goods like steel and vehicles, but so far these requests have been denied.

Annually, Japanese automakers export around 1.37 million vehicles to the United States -- down from a peak of 3.43 million vehicles in 1986, Katayama said at the press conference also attended by executives from Toyota, Honda and other major industry players. These exports are necessary to offer automakers’ full product lines to American motorists, he said.

Katayama also said international economic “uncertainty” was making investment decisions more difficult. He also stressed that Japanese brands have created jobs in the US and functioned as members of corporate America. JAMA groups Japan’s 14 top automakers and motorcycle producers.