According to media reports, U.S. President Donald Trump recently declared that auto trade between the United States and Japan is "unfair" and is considering retaining the 25% tariff on Japanese vehicles. His remarks come as U.S.-Japan trade negotiations enter a critical phase, with just over a week remaining before the deadline. Failure to reach an agreement could expose Japanese car exports to significantly higher tariffs.
In an interview with Fox News, Trump stated, "We don't export cars to Japan. They don't buy our cars. Yet we import millions of cars from Japan every year. That's not fair. Now that the U.S. has plenty of oil production, Japan can fix the trade imbalance by increasing energy purchases or other trade actions."
Trump did not indicate that the two sides were close to reaching a deal or that Japan might receive a tariff delay. Instead, he emphasized that the U.S. could unilaterally dictate trade terms with Japan.
"I'm prepared to send letters to certain trade partners," Trump said in the interview. "I could send one to Japan that says: 'Dear Mr. Japan, here's the deal - your cars coming into the U.S. will be subject to a 25% tariff.'"
These comments suggest that an agreement is still far from reach and highlight the risk that Trump may insist on imposing the full 25% tariff on imported vehicles. The interview was aired shortly after another round of trade talks between Japan's top trade negotiator Ryo Akazawa and U.S. Commerce Secretary Howard Lutnick. Akazawa flew to Washington for in-person negotiations, while the next two rounds of discussions are scheduled to take place via phone.
After the interview aired, Ryo Akazawa posted on the social media platform X, reiterating that talks with the U.S. are ongoing. "Japan-U.S. negotiations are at a critical juncture. We will continue to engage in sincere and pragmatic dialogue," he said, adding that the two sides had agreed to resume negotiations later this week following Trump's remarks.
Following the news, shares of auto-related companies on Tokyo's Topix index fell by about 0.4% on the afternoon of June 30, in contrast to the broader market's 0.8% gain.
Auto tariffs have become the key sticking point in the U.S.-Japan trade negotiations. The U.S. is focused on addressing its large trade deficit in the auto sector, while Japan is keen to protect its automotive industry, a pillar of its economy.
In 2024, Japan recorded a trade surplus of 8.6 trillion yen (approximately $59.3 billion USD) with the U.S., with around 82% of that surplus stemming from automobiles and auto parts. According to U.S. data, Japan ranks as the seventh-largest source of the U.S. trade deficit among all trade partners.
Akazawa has repeatedly stated that U.S. auto tariffs are unacceptable. He pointed out that Japanese automakers have invested more than $60 billion in the United States, creating 2.3 million American jobs and making a significant contribution to the U.S. economy.
