Specter of Trump’s Car Tariffs Forces Allies to Give Ground in Talks


In Japan, the threat of auto tariffs is causing more severe anxieties.

Japanese government officials continue to resist the administration’s invitation to enter bilateral trade talks or offer any concessions. But Japanese auto industry leaders are increasingly concerned about the fate of the 1.7 million cars that the country exports to the United States annually.

Analysts say that if the administration imposes a 20 percent tariff on Japanese auto exports, manufacturers’ costs could go up by $8.6 billion. SMBC Nikko Securities estimated that if automakers passed on such costs to customers, Japan’s car exports would decline by 200,000 units, cutting profits by about 2.2 percent.

When Prime Minister Shinzo Abe visited Mr. Trump at his Mar-a-Lago resort in Florida in April, he politely but firmly declined the president’s suggestion of a one-on-one trade pact, saying that Japan would prefer the United States to re-enter the broad deal among 11 countries known as the Trans-Pacific Partnership. Mr. Trump withdrew the United States from the partnership his first week in office.

After visiting Washington earlier this month to speak with Robert E. Lighthizer, the United States trade representative, Japan’s minister of economic revitalization, Toshimitsu Motegi, told Japanese reporters in Washington that “the discussions will continue, and there are individual areas to be discussed further.”

In South Korea, the threat of auto tariffs has also shaken a trade pact that it recently entered into with the United States. In March, the Trump administration announced that it had reached a deal with South Korea to revise its existing trade deal, which Mr. Trump had often criticized.

As part of that pact, South Korea agreed to give American carmakers more access, while the United States was able to extend a tariff that it charges on foreign trucks. But those pledges have been thrown into question by the threat of new measures on Korean automakers. The deal has not yet been authorized by South Korean lawmakers.

South Korea thought it had put trade tensions with the United States behind it with the conclusion of its agreement, said Troy Stangarone, senior director of trade at the Korea Economic Institute. “That hasn’t turned out to be the case,” Mr. Stangarone said.


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