Mazda 33%·Mitsubishi 21%·Nissan 13%↓
Toyota and Honda Also Impacted if USMCA Revised
As the return of President-elect Donald Trump to the White House approaches, the Japanese automobile industry is trembling. With Trump announcing plans to impose a universal tariff of 10-20% on all imports, there are even forecasts that the operating profits of Japanese car manufacturers could decrease by up to 35%.
On the 18th, Nihon Keizai Shimbun (Nikkei) reported this citing research results from Nomura Securities.
Nomura Securities estimated that if an additional tariff of 60% on Chinese exports and 10% on Japanese exports is assumed, Subaru's operating profit could decrease by 35% by 2025. Subaru sold 317,000 vehicles in the US from April to September this year, of which less than 180,000 were produced in the US. The majority are produced outside the US.
Mazda's operating profit is predicted to decrease by 33%, Mitsubishi Motors by 21%, and Nissan by 13%. Toyota, which has a relatively high US production ratio, is expected to see a 5% decrease in operating profit, while Honda is expected to be almost unaffected.
The current basic tariff rate imposed on cars exported from Japan to the US (excluding pickup trucks) is 2.5%. President-elect Trump has announced plans to impose an additional universal tariff of 10-20% on top of this. In 2023, 1.48 million four-wheel vehicles were exported from Japan to the US, accounting for 34% of total vehicle exports. Nikkei stated that mid-sized brands with limited investment capacity and difficulty in shifting to local US production face greater tariff concerns.
However, large corporations cannot be complacent. During the election period, President-elect Trump pledged to impose a 100% tariff on cars imported from Mexico. There are speculations that Trump might renegotiate the United States-Mexico-Canada Agreement (USMCA) in 2026. If this happens, Toyota, Honda, and Nissan, which have utilized Mexico as a production base, would suffer significant damage.
Honda produces about 200,000 four-wheel vehicles in Mexico, exporting 80% of them to the US. Nissan exports about 300,000 vehicles produced in Mexico to the US. Toyota announced plans to invest $1.45 billion (approximately 2.0171 trillion KRW) in Mexico with US exports in mind, but if tariffs increase, these plans will need to be reconsidered.
The increased tariffs are likely to be passed on to sales prices. Anandiya Das, an analyst at Nomura Securities, stated, "Car prices will rise and new car demand within the US will decrease."
Nikkei reported, "Honda and Nissan plan to strengthen lobbying activities toward the next Trump administration," adding, "It requires difficult strategic decisions on how much the impact on performance can be mitigated."
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