us and japan reach auto tariff deal: winners and losers emerge
tokyo, Wednesday, 23 July 2025.
the united states and japan have come to terms on automobile tariffs. they will be set at 15% mutually. this eases immediate pressures on japanese automakers. goldman sachs securities predicts a ¥1.6 trillion profit increase for seven japanese firms. us automakers are concerned. president trump says japan will invest $550 billion in the us. he also says japan will open its markets to us agriculture. analysts predict vehicle price increases in the next quarter. one expert called the deal ‘close to the best result.’
Market reaction
News of the agreement has already impacted the stock market. Toyota shares saw an intraday surge of 16%, the largest since October 1987 [6]. Mazda shares are showing signs of a buying surge in afternoon trading [6]. Honda’s stock is up 12%, and Nissan’s increased by 10% [6]. Subaru, heavily reliant on the US market for 70% of its sales, experienced an intraday rise of 19% [6].
Analyst perspectives
Analysts are weighing in on the potential effects of the agreement. Iwai Cosmo Securities analyst, Takuto Sugawara, believes a 15% tariff is manageable for automakers through cost reduction and local production [6]. Aizawa Securities fund manager, Ikuo Mitsui, suggests companies may explore raising prices or restructuring supply chains to offset tariff impacts [6]. SMBC Nikko Securities Senior Economist, Koya Miyamae, expressed surprise at the 15% reduction and emphasized the need to monitor export impacts [5].
Tariff details and economic impact
The agreement involves reducing the existing 25% tariff imposed in April to 12.5%, which, combined with the base rate of 2.5%, results in a total tariff of 15% [4]. Yuichi Kodama, Chief Economist at Meiji Yasuda Research Institute, believes this agreement helps Japan avoid a serious recession [5]. Christopher Wong, a currency strategist at OCBC Bank in Singapore, noted the deal resolves uncertainty surrounding tariffs [5]. Carol Kong, a currency strategist at Commonwealth Bank of Australia, sees the lowered tariffs as a positive for Japan [5].
Challenges and concerns
Despite the positive reactions, challenges remain. Kenji Tanaka, Chief Economist at the Japan Auto Manufacturers Association, anticipates increased operational costs for Japanese automakers [5]. Maria Rodriguez, a Lead Supply Chain Analyst, foresees logistical challenges, especially for components sourced from third countries [5]. The American Automotive Policy Council (AAPC), which includes GM, has voiced concerns regarding the 15% tariff reduction for Japanese automobiles [3]. Subaru stated they are monitoring the situation and gathering information [1].