- Japanese officials are seeking any means to persuade President Trump to lower tariffs.
- Toyota’s CTO believes selling American vehicles through their dealers is an “option.”
- Current tariffs could cost Japanese car brands a combined $19 billion this fiscal year.
The hefty tariffs placed on Japanese vehicles and goods by the U.S. administration are expected to cost carmakers billions of dollars, but Toyota might have a solution. As Japan tries to negotiate with the US from its perilous position, it could propose helping American brands sell their vehicles in Japan directly through Toyota dealerships.
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The idea was first proposed by Toyota’s chief technology officer, Hiroki Nakajima, earlier this month. While speaking in a video shared to Toyota’s media site, Nakajima noted that US brands have just 163 dealerships in Japan compared to the more than 4,000 operated by Toyota itself.
Read: Toyota To Hike Prices Again But Won’t Say What Everyone’s Thinking
“When US manufacturers bring cars to Japan, for example, using Toyota’s sales network to deliver them is an option,” he revealed.
In May, Nakajima presented the idea during a meeting between Toyota chairman Akio Toyoda and Prime Minister Shigeru Ishiba after a recent round of negotiations with US officials, The Mainichi reports. Nakajima said no decision has been made about the possible movie, noting that it “should be seen as an option.” Another option would be to export US-made vehicles from Japanese automakers back to Japan, helping to reduce the US’ trade deficit with the country.
The Cost Of Tariffs
Japanese car manufacturers are facing several tariffs, and according to CBT News, the industry is bracing for a collective loss of up to $19 billion this fiscal year. Key tariffs include a broad 24% rate on all goods, as well as a 25% rate on imported vehicles, steel, and aluminum. Japan ships roughly 1.5 million vehicles to the US every year.
Ever since his first term in office, President Donald Trump has pushed feverishly for more American-made vehicles to be sold in Japan. However, his push completely ignores the fact that Japan is a much smaller country than the US, is more densely populated, and has much tighter city streets. Typical US vehicles are simply too big for the streets of Japan, and locals much prefer smaller and more fuel-efficient vehicles, hence why Kei cars are so popular.
However, despite this, it seems Japan recognizes that it needs to appease Trump in some way if it is to negotiate lower tariff rates. If that means Ford, GM, and others selling cars from Toyota dealerships, then so be it.
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