Detroit Automakers Balk at U.S.-Japan Trade Deal
Detroit's Big Three automakers criticized the US-Japan trade deal on Wednesday for setting a lower tariff for Japanese auto exports compared with those from Mexico and Canada, where Detroit automakers operate.
President Donald Trump's accord with Japan appeared to be a "bad deal" for the US industry, said Matt Blunt, head of the American Automotive Policy Council (AAPC), which represents General Motors, Ford and Stellantis.
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The accord between Washington and Tokyo sets a 15-percent tariff for Japanese goods, including autos. Vehicles manufactured overseas currently face a 25-percent levy under a Trump-imposed tariff that took effect in early April.
Japanese Prime Minister Shigeru Ishiba highlighted the relief for Japanese automakers, a sector that accounts for eight percent of Japanese jobs, saying, "we are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume."
But that relief did not sit well with the AAPC, whose members have organized their supply chains around the 2020 US-Mexico-Canada Agreement (USMCA), which Trump negotiated in his first term.
"American automakers still need to review the details of the US-Japan agreement, but any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles with high US content is a bad deal for US industry and US auto workers," said Blunt.
The Japan deal also comes as Trump's administration is engaged in negotiations with other auto-focused countries that face the current 25-percent tariff on finished autos. These include South Korea and Germany, a key player in Washington's trade dealings with the European Union.
The flow of imports from South Korea includes autos from South Korean companies Kia and Hyundai, as well as General Motors, which exports the Chevrolet Trax and other vehicles to the United States from the country.
On Tuesday, GM executives suggested they were hoping for a lower tariff rate from the trade negotiations. Executives noted that affordability of the vehicles in an earnings conference call.
"We have continued to bring the vehicles in from Korea because they're (profitable) and they're very much in demand," said GM Chief Executive Mary Barra. "Customers love those vehicles."