Trump’s tariff deal offers scanty relief for Japan because the Chinese threat emerges

Japanese automakers may have overcome tariffs for us, but replication offers little comfort when Chinese automakers blur their long global edge, complicated by stable structural problems at home.

July 22 President Donald Trump announced this Car tariffs Imports of a car in Japan in the US was reduced to 15% of the current 25%.

However, the light was not yet at the end of the tunnel, the industry experts warned.

“The US trading transaction is certainly a relief that it offers some confidence that the US cars on Japan’s cars will not rise to punitive levels,” said Stefan Angrik, the head of the Japanese and border market economy in Moody’s Analytics.

“But I am ashamed to call it good news. The 15% import tariff is much higher than where Japan began. And the 15% tariff is definitely a higher rate than most expected.”

According to analysts, the greater problem comes from China’s meteorical growth in the world automotive industry. After an important growth market for Japanese brands, China has turned into a dominant competitor.

Angrik, a key problem for Japanese manufacturers is to enhance China’s competition. Chinese pressure on advanced production turned it into a formidable competitor when the domestic demand for cars made in Japan began to soften, he added.

First, his opinion-Carl Brauer, ISEECS Executive Analyst, who noted that Chinese cars with a lower cost remain “the biggest threat” for the automotive industry and economic worldview of Japan.

China is the world’s largest car and exporter manufacturer, especially Electric vehicles. The country’s growing domination in critical components and EV innovations are Increasingly squeezing foreign automakers.

Chinese automakers also make significant entry into Southeast Asia – In the region where Japanese brands are prevalent, such as Toyota, Honda and Nissan .

According to A a AR 2025 G. Report PWCThe share of the market of Japanese vehicles in Indonesia, Malaysia, Thailand, the Philippines, Vietnam and Singapore, commonly referred to as ASEAN-6 in 2023 in 2024.

“(Chinese cars) are expanding to markets where Japanese firms are strongly entrenched. Thailand is one examples,” said Moody’s analytics expert.

For the south -east Asia, The second largest car export market in Japan China also disputes China: Australia.

A Last study ordered by Australian Automobile Deilers Association It predicts that China is ready to surpass other countries as a leading source of Australian car imports over the next decade.

By 2035, 43% of all imported vehicles in Australia are expected to be manufactured in China, which is 17% in 2025. On the contrary, Japanese imports are expected to decline from 32% in 2025 to 22% to 2035.

While large automakers such as Toyota continue to seek success within the country, Nissan Particularly vulnerable to the growth of the threat of China’s automobile industry, Bauer explained.

Previously control errors and planned closure of plants They make up their trouble. Nissan plans to close seven of its 17 plants before the financial 2027 and cut it Global labor is approximately 15% As part of the restructuring plan.

“In general, the forecast for the Japanese automotive industry is very difficult,” said Angrick Moody’s Angrick.

While ToyotaGlobal scale and diversified trail of production give it a relative advantage in the maneuvering of these problems, smaller automakers such as Sabrah and Mazda are under high pressure, noted by Mio Kato, founder of Lightstream Research.

While Subaru and Mazda face a “much greater load”, they have the advantage of strong relationships with Toyota, Kato said.

Mazada, for one, Share a joint plant with ToyotaWhile Subaru is combined with Toyota to make a jointly developed electric vehicle scheduled for 2026 debut.

In the long run, Kato believes that these partnerships can deepen, which can potentially lead to a more formal consolidation within the Toyot umbrella.

“I would not expect (consolidation) will take place in a short term. However, for them, perhaps this is something when you start looking at the end of the decade,” he said.

However, analysts acknowledge that the finalized Trump’s tariff rate brings at least one benefit: a certain predictability.

Although it is still too fast to completely conclude the long -term impact of the new trade agreement between the US and Japan, obtaining a confirmed tariff agreement will allow Japanese automakers to know their prices and expenses forward, experts have been repeated.

However, it remains unclear what tariff rates will be facing other automakers.

“I believe that the absolute case for Japan now understands relatively well, but in terms of how their competitiveness changes, not say, auto cars manufactured in Korea and exported or from Mexico and Canada, which can still affect the profit for Japanese bus stations,” Kato said.