When Donald Trump says “America First,” Japan often wonders what comes second. The latest flare-up? Trump’s renewed threat to slap a 25% tariff on all foreign-made cars, including those from Japan.
In case you missed it, this was the focus of a recent Japan Today Spotlight episode, where we broke down what these potential auto tariffs could mean not just for Japan’s economy, but for the broader Japan-U.S. alliance.
Why does this matter to Japan?
Japan doesn’t just make cars — in many ways, it is a car country. Automakers like Toyota, Honda, Nissan, Mazda and Subaru form the backbone of Japanese manufacturing, exports and jobs. While many of their vehicles are indeed assembled in the United States, a tariff like this could still hit Japan hard.
A 25% tariff would raise the price of Japan-made vehicles entering the U.S., making them less competitive against cars assembled in the United States, Mexico or Canada. That could dent profits, shrink market share, and even accelerate the shift of Japanese production out of Japan — something that’s already been happening for years.
Isn’t Japan already exempt?
Not exactly. During Trump’s first term, Japan and the U.S. had an informal understanding that gave Japan some breathing room — but it was never a formal exemption. Now that Trump is back in the White House, that old deal is effectively gone, and Japanese automakers are once again in the crosshairs.
In other words: nothing is off the table.
The political angle
Trump’s threat isn’t just about trade — it’s about leverage. He’s long argued that Japan takes advantage of the U.S. on everything from car imports to defense spending. Raising tariffs could be a way to push Japan to “pay more” for the U.S. military presence or to open its markets even further to American goods.
It’s a transactional view of alliances — and one that doesn’t sit easily with Japan’s postwar diplomacy.
Could Japan fight back?
Japan’s unlikely to retaliate with tariffs of its own. That’s not its style. It may lean harder into diversifying its trade partners, though, deepening ties with the EU or Southeast Asia. It may also speed up investments in U.S. manufacturing to sidestep tariffs altogether — though that raises another issue: Is Japan hollowing out its own industrial base just to appease American politics?
Where this leaves things
For now, it’s just a threat. For Japanese automakers — and for Japan’s government — it’s a reminder that Trump’s possible return isn’t just about U.S. domestic chaos. It could reshape how Japan does business, builds cars and navigates one of its most critical global partnerships.
Whether this is political theater or a prelude to policy, Japan can’t afford to treat it lightly.
Watch the full Japan Today Spotlight episode here:
What do you think: Is Japan ready for another round of “America First” trade wars?
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