US threatens 35% tariffs on Japan, OEMs face billions in losses

US president Donald Trump has threatened tariffs of up to 35% on Japan unless a deal is brokered in “good faith” before his deadline of 9 July.

The “reciprocal” tariff deadline next week could see sweeping “Liberation Day” tariffs or higher applied across countries that, as of now, are subject to a 10% global tariff by the US. The new threat against Japan is higher than the 24% duty Trump suggested for the country during the “Liberation Day” tariffs announced in April.

The tariff, if enforced next week, would be in addition to the 25% import duty on all vehicles and parts, along with the 50% tariff on steel and aluminium. It means that OEMs including Toyota, Honda, Nissan, Mazda, Mitsubishi, Subaru and Suzuki could be at risk of steep importing costs.

Recent financial results from the Japanese carmakers show that, in most cases, exports from Japan to the US and North America are declining compared to 2024, and the OEMs are taking a financial hit because of it.

Nissan’s exports from Japan to North America (not including Mexico) in April 2025 were down 9.4% year-on-year to 13,884, while the figures for the January to April period this year were down by a quarter compared to the same time last year, from 66,067 vehicles to 48,562.

However, Nissan is less likely to be as negatively affected as other Japanese OEMs, as it has a strong presence in the US which could help it mitigate or avoid the effects of tariffs. With its vehicle assembly plant in Smyrna, Georgia, its powertrain assembly plant in Decherd, Tennessee, and its EV and pick-up plant in Canton, Ohio, the carmaker has a strong presence in the country. It has also been working on improving its regional operations in recent years, looking at North America as one operating region and combining and aligning its supply chain across the US, Canada and Mexico.

While Toyota hasn’t yet released financial results for April onwards, when the tariffs were taking effect, it expects a negative impact. In its forecast of consolidated financial results for FY2026, Toyota said the impact of US tariffs on operating income “is factored in at 180 billion yen ($1.25 bn) as a negative impact of April and May, tentatively”. The OEM has several manufacturing plants across the US including Kentucky, Indiana and West Virginia.

Similarly, Honda said it expects to knock 450bn yen ($3.13bn) off its operating profit for next year due to the tariff impact and recovery efforts. According to the carmaker’s production, sales and export figures for May 2025, Honda has actually been increasing the number of vehicles exported from Japan to North America. The OEM sent 3,262 units to North America in May this year, up from only 62 last year. Between January and May this year, it has imported 10,659 vehicles to the US, up 500% from 2024 when it sent 2,128 units.

Mazda could not offer a financial forecast for 2026 because of the tariffs and said it would be announced “when it becomes possible”.

We will update this story when more information becomes available...