Japanese Prime Minister Shigeru Ishiba announced today (July 23) that U.S. tariffs on Japanese automobiles have been reduced from 25% to 15%, triggering a massive rally in auto stocks. Honda surged over 8%, Toyota jumped nearly 12%, Nissan gained more than 8%, Mazda skyrocketed over 17%, and Mitsubishi Motors climbed beyond 13%. South Korea's Hyundai Motor also rose over 6%, while Kia edged up 0.2%.
According to NHK, the original 25% tariff was first halved to 12.5%, then combined with a 2.5% "most-favored-nation" base rate, resulting in a total 15% tariff. U.S. President Donald Trump had imposed a blanket 25% tariff on all auto imports on March 26, effective April 2.
Data reveals that auto exports accounted for 28.3% of Japan's total exports to the U.S. in 2024, forming a critical pillar of Tokyo's economy. However, Japan's Trade Ministry reported plunging shipments—June auto exports to the U.S. plummeted 26.7% year-on-year, following May's 24.7% drop.
Ed Rogers, CEO of Rogers Investment Advisors, noted that while this marks a "major positive" for Japanese automakers, challenges like competition from Chinese and Korean rivals persist. "Still, it provides much-needed short-term certainty on manageable U.S. tariffs."
On Truth Social, Trump hailed the "biggest deal ever" with Japan, imposing a 15% "reciprocal tariff" on Japanese imports while securing US$550 billion in Japanese investment. He claimed the U.S. would reap "90% of profits," with Japan agreeing to widen market access for American cars, trucks, and agricultural products like rice.
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