Japan is upset and “dismayed” that the US is considering tariffs on imports of vehicles and parts after labeling them a threat to US national security.
So far, the automotive industry has avoided the worst of the US vs. The World trade war, but that might be about to change. Last Friday, the current administration declared that all imports of vehicles and car parts were a threat to US national security, which allows the government to impose tariffs on those goods.
However, the White House stopped short of imposing the 25% tariffs last week, and instead announced a 6-month delay to decide whether or not those tariffs should be implemented. This also allows more time for trade talks between Japan and the European Union.
Japan is understandably quite upset. Having been the number one trade partner of the United States for decades until very recently (in which China is now their number one trade destination), suddenly being declared a security threat seems like a slap in the face.
Akio Toyoda, president of Toyota and chairman of the Japan Automobile Manufacturers Association, said as much in a statement on Tuesday.
"We are dismayed to hear a message suggesting that our long-time contributions of investment and employment in the United States are not welcomed," Toyoda said, according to Reuters. "As chairman, I am deeply saddened by this decision."
All automakers are against imposing any sort of tariffs on vehicles, including GM and Ford. Tariffs on imports would increase costs across the board as many car manufacturers import components for final assembly in the US. It would also put US products at a disadvantage when the inevitable retaliatory tariffs are imposed by other nations.
However, tariffs would be especially bad for Japan, whose number one global export is cars.
The Japan Automobile Manufacturers Association did point out that Toyota, Nissan, and Honda all operate manufacturing plants in the United States that collectively build 4 million vehicles per year. A quarter of those vehicles are exported, but the bulk of them remain in the country for local sale.