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The trade group representing the traditional Big Three US automakers is objecting to the US agreement with Japan, saying it would be unfair to American automakers and parts suppliers.
The trade agreement announced Tuesday by the Trump administration would place 15% tariffs on imports from Japan, including autos and auto parts. The American automakers claim that gives Japanese imports an unfair advantage over other imported vehicles, including those assembled in Mexico and Canada by US companies with a significant number of US parts. Most imported cars – including American cars made outside the United States – face a 25% base tariff rate.
“American automakers still need to review the details of the US-Japan agreement, but any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American built vehicles with high US content is a bad deal for US industry and US auto workers,” said Matt Blunt, president of The American Automotive Policy Council, which represents General Motors, Ford and Stellantis (parent of Jeep, Ram, Dodge and Chrysler brands).
Blunt told CNN on Wednesday that the automakers have expressed their concerns about Japan’s agreement with the Trump administration, just as they had when a trade framework reached with UK lowered tariffs to 10% on some luxury cars built in England, such as the Rolls Royce, Bentleys, Land Rovers, Jaguars and Aston Martins.
“We said then, we didn’t want that to become the precedent for other trade deals,” he said.
The three automakers all referred requests for comment to AAPC.
Japan exported 1.3 million cars to the United States last year, or about 8% of the US market, according to data from S&P Global Mobility. That’s about half of the 2.5 million imported from Mexico, but just above Canada’s 1.1 million.
However, the Japanese automakers build most of the cars they sell in the United States in North America. Together, they built 3.3 million cars at US plants, far more than the vehicles they imported from Japanese plants.
But auto plants in Canada and Mexico use far more US-made parts than those built in Japan. American auto parts manufactures shipped $35.8 billion in parts to Mexico and $28.4 billion to Canada in 2024, according to Commerce Department data, but only $1.5 billion to Japan.
And US car part makers employ more than 500,000 Americans, nearly twice as many workers as US auto plants, according to Labor Department data.
The United States, like most countries, has virtually no auto exports to Japan. Only 6% of cars sold in Japan are imports from other countries, Blunt said.
“Japan has been one of the most closed automotive markets in the world,” he said.
President Donald Trump posted on his Truth social media platform Wednesday that “Japan is, for the first time ever, OPENING ITS MARKET TO THE USA, even to cars, SUV’s, Trucks.”
But Blunt doesn’t see that happening any time soon.
“We certainly share the president’s objective of opening markets that are closed to US exports, but Japan is going to be a very tough nut to crack,” he said.
Japan does not impose tariffs on the relatively limited number of US cars it imports, but Blunt said there are a number of technical barriers. For example, Japanese certification processes differ from US specifications, there are limited dealership opportunities and Japanese car buyers prefer Japanese cars. American automakers have also greatly moved away from the small car portion of the market that is the central to Japan auto sales.
“When we think about markets that present real opportunities for greater US exports, I don’t think Japan is often on that list,” he said.
Justin Wolfers, an economics professor at the University of Michigan, also questioned how many American cars the Japanese will ultimately buy.
“The fundamental problem is if you’ve ever been in Tokyo the cars are small and the roads are narrow,” Wolfers said. “They don’t drive American cars because they don’t meet Japan’s needs.”
CNN’s Matt Egan contributed to this report.
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