Tensions between the United States and Japan over steep tariffs on car and steel imports are reaching a boiling point. Japan’s Prime Minister has called the situation a "national crisis" that could severely impact the backbone of the Japanese economy – the automotive industry. In response, Japan’s top trade negotiator Rjosei Akazawa is heading back to the U.S. for a fourth round of trade talks starting on May 30, just a week after the third round in Washington.

🔹 Trade Dispute Heats Up

Akazawa plans to meet with U.S. Treasury Secretary Scott Bessent, with the central topic being the removal of the 25% U.S. tariff on Japanese cars — a barrier Tokyo sees as unacceptable for fair trade. “Our stance remains unchanged,” Akazawa said. “We firmly demand the removal of these tariffs. But we also seek an agreement that benefits both sides.”

The U.S. imposed the tariffs to protect its domestic industries, but Japanese officials argue they now disrupt global trade balance.

🔹 Small Suppliers Fear for Survival

While major automakers like Toyota and Nissan have room to maneuver, smaller suppliers are feeling the pressure. At Kyowa Industrial in Takasaki, where 120 workers produce parts for race cars, anxiety is running high. “What the hell are we supposed to do?” said company president Suzuki.

Kyowa doesn’t export directly to the U.S., but Suzuki fears automakers will push suppliers to slash prices to offset the cost of the tariffs — a move that could drive small firms to the brink.

Ashikaga Bank, which supports hundreds of manufacturing firms, warns that higher prices in the U.S. could reduce demand and cut back on orders.

🔹 Carmakers Call for Solidarity, but Help Is Limited

Internal letters seen by Reuters reveal that large automakers are quietly urging their U.S. branches to support Japanese suppliers. Nissan told its partners to honor current price agreements and pledged to cover tariffs for up to four weeks. Toyota promised to act in “good faith” and asked suppliers for ideas on how to ease the burden. Ford is evaluating its supply chain risks and may shift sourcing or processes accordingly.

Subaru, which sells about 70% of its cars in the U.S., has already announced price increases for some models. CFO Shinsuke Toda said the company is willing to discuss cost-sharing with suppliers, but admitted that the path forward remains uncertain.

🔹 Analysts Warn of a Chain Reaction

Economists caution that the issue goes beyond the auto industry. A long-term 25% tariff could cripple entire regions of Japan already suffering from population decline and economic stagnation.

Under current rules, the 25% car tariff remains in place, while other goods enjoy a temporary reduction to 10% — a grace period set to expire in July.

The U.S. administration says it aims for “fairness and balance” in trade and seeks to protect national economic security.

🔹 What’s Next?

As a possible compromise, Japan is offering to expand shipbuilding cooperation, streamline vehicle import certifications, and increase imports of corn and soybeans from the U.S. Whether this will be enough to soften Washington’s position remains to be seen.

#TradeWars , #Tariffs , #Japan , #TradingCommunity , #worldnews




Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!

Notice:

,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“