Japanese automakers warned that President Donald Trump’s trade tariffs will cost them billions in lost profits, describing the import duties as a "new normal” that the industry will be forced to endure for the foreseeable future.
The cautionary message came two months after a trade agreement that Japan negotiated with the United States took effect. Under the deal, Tokyo agreed to invest $550 billion in the United States in exchange for a 15% across-the-board tariff on its exports. Trump had initially imposed a 27.5% tariff on Japanese exporters, a devastating tax for the country’s crucial automotive sector.
Japanese auto companies have publicly expressed gratitude for the government's negotiation of a better rate, but many industry executives have privately complained that even a 15% tariff erodes already thin profit margins for manufacturers. They are concerned that the tariffs may stick even beyond the current U.S. administration.
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