15% tariff on cars imported from Japan, 25% on imports from Mexico? The three major American automakers are very dissatisfied with the US-Japan trade agreement

The US-Japan trade agreement has sparked strong opposition from General Motors, Ford, and Stellantis (the parent company of Chrysler).

According to CCTV News, on the 23rd local time, Japanese Prime Minister Shigeru Ishiba stated at a live press conference that Japan and the United States have reached an agreement on tariff issues, with the US imposing a 15% tariff on Japan. For automobiles, the US will impose a 12.5% tariff on cars imported from Japan, combined with the previous 2.5% tariff rate, totaling 15%.

In response, the American Automotive Policy Council (AAPC), representing the interests of the three major automakers, stated that if the tariff on Japanese imported cars is reduced to 15%, while vehicles from Canada and Mexico remain at 25%, this is an unfavorable agreement for the US domestic automotive industry and workers.

Trump's tariffs have caused a certain impact on the US automotive supply chain. CCTV News pointed out that the US government's measure to impose a 25% tariff on imported cars took effect on April 3. According to data from the American Automotive Research Center, this tariff policy will lead to an increase in costs of $107.7 billion for all US automakers, with the three major automakers Stellantis, General Motors, and Ford facing a cost increase of $41.9 billion.

Japan's automobile tariff level is significantly lower than that for Canada and Mexico

According to the new agreement proposed by the Trump administration, the tariff on imported cars from Japan may be reduced to 15%, while imported cars from Mexico and Canada will still face a high tariff of 25%. Trump even threatened to raise the tariff on cars from Mexico to 30% and from Canada to 35% on August 1.

Cars from North America (Mexico, Canada) typically have a higher proportion of US-made parts, and many models are essentially an extension of the "Made in America" supply chain. In contrast, there are almost no US-made parts in Japanese imported cars. This means that the more "American-made" a car is, the higher the tariff it will have to pay.

AAPC Chairman Matt Blunt stated that while they are still reviewing the content of the agreement, this arrangement will impose higher tariffs on cars produced in North America with a higher US content, while imposing lower tariffs on Japanese imported cars, which is an unfavorable agreement for American industry and American auto workers.

In response, White House spokesperson Kush Desai defended the agreement, stating that it is a historic victory for American automakers, ending Japan's unfair trade barriers against American-made cars

Three Major Automakers Suffer Severe Losses, Profits Eaten Up by Tariffs

The financial impact of tariff policies on American automakers has already become apparent.

General Motors disclosed on Tuesday in its second-quarter earnings report that tariff impacts led to a loss of $1.1 billion, and the company expects the negative effects of tariffs to become even more severe in the third quarter. This forward guidance directly triggered pessimism in the market, causing General Motors' stock price to drop over 8% during trading on Tuesday.

Stellantis also stated on Monday that it expects the impact of U.S. tariffs on automotive and parts imports to further expand in the second half of 2025. Currently, the company has already incurred a loss of 300 million euros (approximately $352 million) due to Trump's tariffs and has been forced to cut shipments and reduce production capacity.

The UK-US Trade Agreement Also Faces Doubts

This is not the first time the AAPC has expressed concerns about trade agreements. As early as May this year, the AAPC criticized the trade agreement announced by Trump and the UK, believing it would harm the American automotive industry.

According to the agreement, UK automakers can export 100,000 cars to the U.S. each year under a 10% tariff, nearly covering the total export volume from the UK to the U.S. last year. The AAPC stated, "This will hurt American automakers, parts suppliers, and workers."

Although Trump buffered tariffs on some parts in April and extended the duty-free treatment for North American parts that meet the rules of origin under the USMCA, the 25% tariff on imported cars remains in place, and the tax on complete vehicles still looms large