Japan risks losing $17 billion in potential U.S. car exports after President Donald Trump imposed a 25% tariff on the automotive sector, according to the International Trade Centre (ITC).
“Japan’s automotive sector accounts for 20% of its total exports, with the majority heading to the U.S. Now, with a flat 25% tariff in effect as of yesterday, Japan could face a $17 billion drop in export potential to the U.S.,”
— Julia Spies, Chief of Trade and Market Intelligence, ITC
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US Implements Sweeping Tariffs on Vehicles and Parts
President Trump’s administration confirmed Wednesday that the 25% tariffs on cars and trucks would begin Thursday, with additional duties on auto parts scheduled for May 3.
The tariffs apply to more than $460 billion in annual imports of vehicles and parts, according to a Reuters analysis.
Countries like Slovakia, Japan, and Honduras are among those most exposed, with the U.S. representing a significant share of their auto export markets, the UN trade agency reported.
Japan Eyes New Markets Amid Tariff Blow
The ITC suggested Japan may turn to alternative destinations to offset its U.S. losses.
“Markets such as China, Germany, the Philippines, and Thailand have untapped potential for Japanese vehicles—equal to the estimated loss in the U.S.,”
— Julia Spies, ITC
Nearly half of all cars sold in the U.S. last year were imports, GlobalData revealed.
Tariffs May Cost American Consumers Over $30 Billion
The Anderson Economic Group estimates American consumers more than $30 billion more in vehicle prices and see a decline in car sales during the first full year of these tariffs.
Amid the announcements, workers at automaker Stellantis voiced concerns about job security and the future of their industry.
The ITC, a collaboration between the World Trade Organization and the United Nations, works to help developing and transition economies boost sustainable growth through exports.
