US Big Three Carmakers Feel Handicapped by Japan Tariff Deal
By Reuters | 22 Jul, 2025

American cars assembled in Mexico and Canada face higher tariffs than those imported from Japan.

A group representing General Motors Ford and Chrysler-parent Stellantis on Tuesday raised concerns about a trade deal that could cut tariffs on auto imports from Japan to 15% while leaving tariffs on imports from Canada and Mexico at 25%.

Matt Blunt, who heads the American Automotive Policy Council that represents the Detroit Three automakers, said they were still reviewing the agreement but "any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers."

Trump has threatened to hike tariffs on Mexico to 30% and Canada to 35% on August 1. 

White House spokesman Kush Desai defended the deal, calling it "a historic win for American automakers by putting an end to Japan’s unfair auto trade barriers for American-made cars."

GM said Tuesday its second-quarter earnings took a $1.1-billion hit from tariffs and expects the impact to worsen in the third quarter.

Stellantis said Monday it expects more impact from U.S. tariffs on vehicles and auto part imports in the second half of 2025, reporting Trump's tariffs had cost it 300 million euros ($352 million) so far as the company reduced vehicle shipments and cut some production to adjust manufacturing levels.

In May, AAPC criticized Trump's announced trade deal with Britain, saying it would harm the U.S. auto sector.

British carmakers will be given a quota of 100,000 cars a year that can be sent to the United States at a 10% tariff rate, almost the total Britain exported last year. 

"This hurts American automakers, suppliers, and auto workers," AAPC said.

Trump in April softened the blow of his auto tariffs by easing the impact of duties on parts and materials, but left in place 25% tariffs on imported vehicles. 

He also extended a duty-free exemption for North American parts that comply with the U.S.-Mexico-Canada trade agreement rules of origin.

($1 = 0.8521 euros)

(Reporting by David Shepardson; Editing by Christopher Cushing and Stephen Coates)