The United States imposes a 25% tariff on auto parts, Japanese companies will be hit hard

The U.S. Trump administration began imposing a 25% tariff on major automotive components such as engines and transmissions starting in the early hours of the 3rd. This is one of the important categories exported from Japan to the U.S. and will impact Japanese companies. However, the U.S. government has set a two-year tax reduction period for cars produced in the U.S., considering that most components used by automakers rely on products manufactured overseas. The measure to impose a 25% tariff on imported cars was initiated on April 3rd, and this new tariff on components will be an additional burden for automotive-related companies that primarily operate in the U.S. According to Japan's trade statistics, the export value of automotive components to the U.S. is expected to increase by 14.4% in 2024 to approximately 1.2 trillion yen, while the export value of cars is expected to rise by 3.1% to about 6 trillion yen. The combined export value of cars and components accounts for one-third of Japan's total exports to the U.S