US Automakers Express Frustration Over New Trade Deal with Japan
A recent trade agreement between the United States and Japan has sparked significant backlash from American automakers. President Donald Trump announced a deal that reduces tariffs on Japanese imports to 15 percent, including vehicles and auto parts. This move comes after months of threats to impose a 25 percent tariff on Japanese carmakers like Toyota, Honda, Subaru, Mazda, and Nissan.
The new agreement has raised concerns among US-based automakers, who argue that it gives their foreign competitors an unfair advantage. Representatives from the Detroit Big Three — General Motors, Ford, and Stellantis (formerly Chrysler) — have criticized the deal, claiming it undermines domestic manufacturing and puts US workers at a disadvantage.
Matt Blunt, head of the American Automotive Policy Council, which represents these major automakers, called the agreement a “bad deal for US industry and US auto workers.” He emphasized that the lower tariff rate for Japanese imports, compared to those on North American-built vehicles, is particularly concerning.
The White House had previously framed the tariffs as a way to boost domestic manufacturing. However, US automakers argue that the policy is having the opposite effect, cutting into their profits at a time when they are under pressure to expand operations in the US.
General Motors recently reported a sharp decline in income, with a $1.1 billion drop in the past quarter. The company expects to pay between $4 billion and $5 billion in tariffs this year. Stellantis, which operates brands such as Jeep, Dodge, Ram, and Chrysler, lost $2.68 billion in the first half of 2025 while paying $350 million in US tariffs.
Executives from these companies say that despite most of their production happening in the US, they still face high costs due to the need to import certain parts. Ford’s CEO, Jim Farley, explained that while 75 to 80 percent of parts in a $40,000 to $50,000 F-150 are made in America, some components like fasteners and washers are not available domestically.
Despite the push for job creation, the promised manufacturing job boom has yet to materialize. Combining the May and June jobs reports, Americans lost 14,000 manufacturing jobs, even as other sectors added positions.
President Trump, however, hailed the deal as a major victory. He claimed it was the largest trade deal in history and stated it would create “hundreds of thousands of jobs.” As part of the agreement, Japan will purchase 100 Boeing planes and increase defense spending with US firms by $3 billion annually.
Japanese companies had initially feared the impact of a 25 percent tariff, warning it could lead to higher consumer prices and job losses at US-based factories. Now, they appear to be clear winners. On Wall Street, shares of Japanese car brands saw significant gains. Toyota’s stock price rose 13 percent in early trading, while Honda, Mazda, and Nissan also saw increases.
However, consumers may not see immediate relief. Erin Keating, an analyst at Cox Automotive, noted that even the lower tariffs are contributing to price hikes. She pointed to rising “destination charges” — fees tied to vehicle delivery — since April, when Trump first introduced the automotive tariffs.
Additionally, car companies are preparing for a fresh lineup of 2026 model-year vehicles, which often leads to price increases during the fall dealership refreshes. Keating also highlighted that Japanese brands like Toyota and Honda continue to offer affordable sedans, which remain popular among budget-conscious shoppers. In contrast, US automakers have reduced their sedan offerings, while models like the Toyota Camry and Honda Civic continue to sell well.
