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The American auto industry is raising red flags over a recent trade decision that would lower tariffs on vehicles imported from Japan, while maintaining higher duties on cars from neighboring Canada and Mexico.
The American Automotive Policy Council (AAPC), which represents General Motors, Ford, and Stellantis, has voiced strong opposition to the U.S. government’s latest move to cut Japanese auto tariffs to 15%. In contrast, imports from Canada and Mexico would still face a 25% tariff.
According to Matt Blunt, president of the AAPC, the policy sends the wrong message to American manufacturers.
“Any agreement that charges a lower tariff for Japanese vehicles with little or no U.S. content than for North American-built vehicles with high U.S. content is a bad deal for American automakers and workers,” he stated.
White House Defends Japan Agreement
Despite industry backlash, the White House has defended the trade decision. Spokesman Kush Desai called it
“a major step forward in ending Japan’s trade barriers to U.S.-made cars.”
Meanwhile, President Donald Trump has floated further tariff increases, threatening to raise duties on vehicles from Mexico to 30% and from Canada to 35% starting August 1.
Tariffs Already Taking a Toll
American automakers are already dealing with the financial blow from existing trade duties.
- General Motors revealed this week that its second-quarter earnings took a $1.1 billion hit due to tariffs and warned of even larger losses in Q3.
- Stellantis also reported a €300 million ($352 million) loss linked to tariff expenses. The company has reduced shipments and adjusted production to cope, and anticipates further impact in the second half of 2025.
Similar Frustration Over UK Deal
This isn’t the first time the AAPC has sounded the alarm. Back in May, the group criticized a trade agreement with the United Kingdom, which allows British carmakers to export up to 100,000 vehicles annually to the U.S. at a 10% tariff, almost equivalent to the entire number of vehicles exported by the UK last year.
The council argued this deal also harms “American automakers, suppliers, and workers.”
Earlier in April, Trump revised the tariff structure, easing duties on certain auto parts and materials. However, he retained the 25% tariff on imported vehicles, while extending duty-free status for North American parts that meet USMCA origin rules.
