Nikkei Chinese Edition recently ran a report on the expected impact on Japan’s automobile industry of the 25 percent tariff that the U.S. is planning to impose on imported cars. The Japanese auto industry accounts for nearly 30 percent of Japan’s total exports to the United States.
With declining auto exports, Japan’s domestic production is also expected to decline, forecasted to impact the Japanese economy by an estimated 13 trillion yen (about US$86.631 billion) – more than 2 percent of Japan’s nominal GDP. “If these tariffs take effect, it will have a huge impact on the Japanese economy, which relies heavily on the automobile industry.” According to data from the Japan Automobile Industry Association, Japan’s domestic automobile production in 2024 was 8.23 million vehicles. Japan’s 2024 automobile exports to the United States were close to 1.37 million vehicles, and Japan’s exports to the United States were the largest in terms of destination countries.
The new tariffs will also affect related industries such as steel and logistics, impacting employment of around 5.58 million people. By May 3, the United States will impose a 25 percent tariff on key components such as engines and transmissions. Japanese Chief Cabinet Secretary said at a press conference that he was “extremely regretful” and clearly indicated that he had requested Japan be excluded from the scope of the reciprocal tariffs.
Source: Nikkei Chinese, March 28, 2025
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