The Japanese auto industry is sounding the alarm. The Japan Automobile Manufacturers Association (JAMA) is calling on the government to intervene to protect Japanese manufacturers from the heavy import taxes that the United States could impose as early as April.
Tariffs that threaten the Japanese economy
JAMA President Masanori Katayama, who is also President of Isuzu Motors, expressed his fears at a meeting with the Minister of Trade and Industry, Yoji Muto, in Tokyo. Senior executives from Toyota, Honda and Nissan were also present.
“If the Trump administration applies these heavy taxes on imports of vehicles and auto parts from Japan, Canada and Mexico, it will harm not only our industry but also the economies of both countries.”
- JAMA statement
A direct impact on Toyota, Honda and Nissan
The U.S. remains the leading market for Toyota, Honda and Nissan, which sell some of their most popular models there. Many of those vehicles are produced in Canada and Mexico, making them vulnerable to both the threatened 25-percent tax on automotive imports and the 25-percent tax on steel and aluminum, scheduled to take effect on March 12.
Among the manufacturers concerned, Toyota, Honda and Nissan would be heavily exposed to tariffs on vehicle imports. Subaru and Mazda are also affected, notably because of their dependence on exports.
An industry unable to pass on costs
At the meeting - which was held behind closed doors - auto executives expressed their inability to pass on these costs to American consumers. Yoji Muto confirmed their concerns, underlining the potential economic consequences for the Japanese automotive industry.
The Minister also held talks with the Japan Iron and Steel Federation, which fears a collapse of the global steel market if protectionism spreads. Tadashi Imai, President of Nippon Steel, worries about the negative effects on the Japanese steel industry.
Towards a US-Japan trade war?
As the Trump administration intensifies its protectionist policies, Japan is trying to negotiate a favorable outcome. The future of Japanese automotive exports to the U.S. is at stake, and with it the economic stability of the sector.