Toyota plans manufacturing plant in Japan, despite US tariff impact

US tariff changes: Visual map of key trade rates

Recent trade deals have been changing tariff rates for various countries, seeing some drop from previously threatened higher tariffs, while others have increased. Each rate holds consequences for the automotive industry, potentially shifting supply chains and flows as OEMs, suppliers and logistics providers alike attempt to ascertain the most optimal, efficient and cost-effective transport routes and markets.

Anushka Dixit

The plant is due to begin operations in the early 2030s, according to the OEM, with production models made there to be determined in the future. The plant is still pending stakeholder cooperation, including that of the local communities.

The move aims to maintain production capacity of 3m vehicles in Japan, as well as create a “plant of the future”, the carmaker said.

Interestingly, Toyota is still forging ahead with investment despite the impact of the US tariffs, which set a rate of 15% on imports from Japan. It follows Toyota’s profit warning, issued yesterday, where the OEM downgraded its full-year profit forecast, expecting a ¥1.4tn ($9.5bn) hit from the US tariffs, considerably more than estimated for GM ($5bn) and Ford ($3bn). In its financial results, Toyota said: “Despite the challenging external environment, we have continued to make comprehensive investments as well as improvements such as increasing sales volume, cost reductions, and expanding value chain profits, thereby minimising negative impacts.”

US reaches trade deal with Japan, puts 93% tariff on Chinese graphite

Japan’s trade deal with the US, although not finalised yet, includes reducing vehicle imports and automotive parts imports from 27.5% to 15%, which the US president Donald Trump said was “perhaps the largest deal ever made”.

As part of the deal, Japan pledged to invest $550bn in the US, which US treasury secretary Scott Bessent said would fund major projects in the country.

The framework agreement means that Japanese carmakers have the upper hand by moving cars from Japan directly to the US, rather than importing from nearshoring countries like Mexico or Canada where, Japanese carmakers have significant production and where tariffs are at least 25%. Toyota is among many Japanese carmakers like Nissan, Honda and Mazda that have facilities in Canada and Mexico.