Will the inauguration of President Trump put Japanese automakers in a difficult position?

[dylanfoos]

President Donald Trump's inauguration ceremony took place on January 20, 2025 (early morning of the 21st Japan time) at the US Capitol in Washington, D.C. After delivering his inaugural address, Trump entered the White House and signed as many as 100 "executive orders" that will enable the swift implementation of important policies. What is the future of Japanese automakers?

The feared EV will slow down further?​

Two days have passed since Mr. Trump was inaugurated as president for the second time. As expected, he signed nearly 100 executive orders on the day he took office. There are surprisingly many decisions that the president can make freely, such as withdrawing from the WHO after labelling the COVID-19 response as a "failure" (and rightly so), and withdrawing from the Paris Agreement on global climate change. This is unthinkable in Japan. For this reason, it was predicted that there would be major moves against the Japanese automobile industry, such as the imposition of tariffs on imports from Mexico and Canada. However, it seems that there will be no movement on tariffs. This is great news for Mazda, which imports a lot from Mexico, and the stock price jumped 5%. However, it became clear that "tightening measures are likely after all," and the stock price suddenly fell 10% at the start of trading on January 21st! Trump's feelings cause wild fluctuations in stock prices! In addition to Mazda, Nissan, which has a large sales ratio of products manufactured in Mexico, will no doubt be greatly affected. However, Japanese manufacturers such as Mazda and Nissan are not the only ones that manufacture cars in Mexico. GM and Ford also produce a significant number of vehicles in Mexico. Since Trump likes making deals, we can assume that he will make a threat and then enter into individual negotiations. Of course, it won't end for free. Honda and Subaru also rely on the American market. However, in the case of Honda, there are almost no exports from Japan. The only concern is the Canadian factory. Trump has said he will also impose tariffs on imports from Canada, which will have a major impact on Honda. Subaru, which exports a lot from Japan, has anticipated the tariff increase and has begun moving production facilities for Subaru cars sold in the United States to the United States. Toyota seems to be making careful preparations. It has already offered to donate to the Trump administration, showing its willingness to submit. In this way, the Trump camp considers it possible to make a deal. We may receive requests to increase investment in the United States, but as long as we continue doing business in other countries, we will have to accept certain conditions. This is not limited to the United States. What will happen next? Unfortunately, I have no idea. I asked several car makers who are familiar with the US, and they are also having trouble. One thing is for sure: protectionism will come. "Make cars in America if you want to sell them there." This is what has been said since the 1980s, so it's inevitable. That's why Japanese automakers built factories in America.

Which manufacturers will be at the mercy of this?​

What concerns me is the future of electric vehicles. With the United States withdrawing from the Paris Agreement and saying it will accelerate the extraction of oil and shale gas, it looks like electric vehicles will be in a period of decline. Of course, there will be no more subsidies. When I write this, you may wonder, "What will happen to Elon Musk's Tesla?" But Trump and Elon Musk must have some kind of secret. It will be interesting to see what kind of preferential treatment will replace the subsidies. The Japanese automakers will be the ones to bear the brunt. Honda, the one most likely to be affected, changed direction as soon as Trump's inauguration was decided. They have announced their focus on hybrids and PHEVs. Toyota has already predicted this and switched to "Plan B" to promote the spread of electric vehicles. Mazda was late to the game, so this was perfect. Nissan may be in a panic and weak at change. Either way, it seems that we will see Darwinian evolution, where "the ones who can adapt survive." It's hard to predict what policies Trump will put forward in the future, but I think it will be tough for manufacturers who can't respond quickly.

Best Car

 

[Gecko]

ADMIN NOTE: While this is a political subject, let's be sure the discussion is rooted in impacts to the automotive industry and tangible scenarios.

 

[Gecko]

Two things I'm going to say about this:

1) I don't envy automakers right now, at all. The constant ping pong-ing and flip flopping on climate policy costs them hundreds of millions of dollars at a time. EVs, no EVs, hybrids, ICE, back to EVs, now no EVs... these changes kick off decisions around R&D that consume most of the balance sheet for every major OEM and trying to plan for every "if, then, and, or" scenario is impossible.

2) It feels to me like at the moment, the excitement around EVs has faded and that makes me very concerned for Lexus with Toyota's plan for the brand to be fully electric by 2035. I won't go into my feelings around how badly Toyota has mismanaged Lexus over the last 15 years, but here again, the industry is on the verge of another major shift and it seems like Lexus may be on the wrong side of it (again).

 

[ssun30]

EVs are NOT in a decline. Their growth slowed down. There will be a big shake-up in the EV market, and Lexus can still benefit from it.

Having a pragmatic EV strategy is even more important in these times. Legacy brands need to stop trying to become the "second Tesla". But at the same time knee-jerk reactions are always dangerous and car companies would be making huge mistakes again if they swing from "all BEVs" to "no BEVs". TMC is clearly following BMW's strategy of not over-investing on dedicated EV platforms/production, and focusing on co-existence of HEV/PHEV/BEV on the same platform/production line. BMW is the second most hated brand for "environmentalists" yet they have the fastest BEV growth among legacy car brands so this strategy clearly works (although the side effect is BMW lost the ability to build a lightweight ICEV). In legacy brands, the Korean brands are the only ones that successfully transitioned to dedicated BEV platforms and production lines because they started planning their roadmap around them way back in 2018.

What slowed down EV adoption in North America is the lack of a national charging standard and multiple competing charging networks. This is an example where free market competition is NOT helpful and a common standard is better. We don't have multiple standards for gasoline fuel pumps and hoses. What really made China an EV powerhouse is the early adoption of a national charging standard. And I can say this with personal experience, because even back in 2017-2018, I didn't have to worry about charging my EV on an incompatible network. But with NACS becoming standard this biggest hurdle goes away and EV adoption can get back on track.

Rumors are that TMC's next generation PHEVs will have 50-100% increase in EV range. And they are calling their 200km (WLTP) PHEVs "practical BEVs". So 2035 Lexus products can definitely be 100% "BEV" while still having an ICE in them. In my imagination by 2035 a mainstream Lexus "practical BEV" product would be something like a "RX500e" with a 200PS 1.5T ICE and 200PS motor for a total of 400PS, ~30kWh net capacity and 200km WLTP/100mi EPA range.

 

[mikeavelli]

EVs don’t make money. Tesla still gets tax credits. Everyone else’s it’s a multi billion dollar loss every year. Their growth is based on tax credits and giving them away today.

To me especially on the Lexus side, the tariffs would make the RX and NX (etc) explode in price. It is wild to think NAFTA is just being thrown out the window to fight with two countries much smaller than us.

Toyota still has the billion dollar plant being built and they must haft something figured out on how the new generation of vehicles will make a profit.

 

[Levi]

BEVs are here to stay, and I think Toyota understands that. Toyota, BMW and Kia/Hyundai are the most future proof brands.

A world war/nuclear war will have way worse impact on BEVs than Trump’s anti-BEV politics.

 

[mediumhot]

EVs don’t make money. Tesla still gets tax credits. Everyone else’s it’s a multi billion dollar loss every year. Their growth is based on tax credits and giving them away today.

To me especially on the Lexus side, the tariffs would make the RX and NX (etc) explode in price. It is wild to think NAFTA is just being thrown out the window to fight with two countries much smaller than us.

Toyota still has the billion dollar plant being built and they must haft something figured out on how the new generation of vehicles will make a profit.

This. Demagogue hustling the whole bargain basement from the highest official level. I don't think we've ever seen such thing.

 

[qtb007]

RX and NX get almost all of their engines and transmissions from Toyota West Virginia. Does this mean a 25% tariff crossing into Canada and then a 25% tariff crossing back into the US?

 

[CRSKTN]

There are surprisingly many decisions that the president can make freely, such as withdrawing from the WHO after labelling the COVID-19 response as a "failure" (and rightly so)

Not only are you pushing misinformation, as your country is in a constitutional crisis and a coup by third parties.

Also LOL at low information conservatives forgetting who was President at the time. 🤣🤣🤣

1.25 million dead and still blaming others.

 

[Sulu]

RX and NX get almost all of their engines and transmissions from Toyota West Virginia. Does this mean a 25% tariff crossing into Canada and then a 25% tariff crossing back into the US?

This is a small part of a larger question about autoparts produced in Mexico and Canada for which I have yet to see a coherent answer. The 3 countries have a highly-integrated auto-manufacturing system, including auto parts, larger components (such as Toyota engines) and fully-assembled vehicles that may be sold into any of the 3 countries.

One basic part, such as a crankshaft, is produced in Canada, crosses the border into the USA (potentially subject to any newly-imposed tariffs in contravention of the USMCA free-trade agreement) to be integrated into a larger component, crosses back to Canada and is further assembled here, and crosses the border again (subject to tariffs again?). I have read that 1 such basic part may cross the border 6 or 7 times (subject to tariffs each time?) before final assembly into a finished car or truck. If the vehicle is finally assembled in Canada or Mexico but sold in the USA, is it subject to tariffs one final time?

 

[dylanfoos]

Not only are you pushing misinformation, as your country is in a constitutional crisis and a coup by third parties.

Also LOL at low information conservatives forgetting who was President at the time. 🤣🤣🤣

1.25 million dead and still blaming others.

Honestly, I just posted the Best Car article and left it as that. Let’s just stay out of the politics and talk about cars as that’s what the forum is for.

Thank you.

 

[mediumhot]

This is a small part of a larger question about autoparts produced in Mexico and Canada for which I have yet to see a coherent answer. The 3 countries have a highly-integrated auto-manufacturing system, including auto parts, larger components (such as Toyota engines) and fully-assembled vehicles that may be sold into any of the 3 countries.

One basic part, such as a crankshaft, is produced in Canada, crosses the border into the USA (potentially subject to any newly-imposed tariffs in contravention of the USMCA free-trade agreement) to be integrated into a larger component, crosses back to Canada and is further assembled here, and crosses the border again (subject to tariffs again?). I have read that 1 such basic part may cross the border 6 or 7 times (subject to tariffs each time?) before final assembly into a finished car or truck. If the vehicle is finally assembled in Canada or Mexico but sold in the USA, is it subject to tariffs one final time?

Pretty sure they will make up the rule as they go regarding all of this mess. You would assume one would cover all the bases before additional duties kick in but apparently that's not how it works in 2025. US threw the bone first and Canadians threw it back in sole spite without thinking one bit. Maybe Mexico will end up being the most sensible here in the end but no matter what happens China is jumping for joy watching this north American fumble.

 

[qtb007]

This is a small part of a larger question about autoparts produced in Mexico and Canada for which I have yet to see a coherent answer. The 3 countries have a highly-integrated auto-manufacturing system, including auto parts, larger components (such as Toyota engines) and fully-assembled vehicles that may be sold into any of the 3 countries.

One basic part, such as a crankshaft, is produced in Canada, crosses the border into the USA (potentially subject to any newly-imposed tariffs in contravention of the USMCA free-trade agreement) to be integrated into a larger component, crosses back to Canada and is further assembled here, and crosses the border again (subject to tariffs again?). I have read that 1 such basic part may cross the border 6 or 7 times (subject to tariffs each time?) before final assembly into a finished car or truck. If the vehicle is finally assembled in Canada or Mexico but sold in the USA, is it subject to tariffs one final time?

I don't know much about the purchasing and import side of the business, but I'd expect a hypothetical part that crosses the border multiple times would be hit for at least any value added at each place.

Typically, parts don't go MX > US > MX > US > MX > US as they usually move from low cost to higher cost for final assembly... but I'm 100% aware of at least some expensive parts that go China > CAN > US > CAN > US. I wouldn't be shocked if the steel for body production at the Lexus plants came from the US because Michigan, Ohio, and Pennsylvania are literally right there. I expect that Canada would use that as leverage in their own tariffs versus leaving it on the table.

 

[mikeavelli]

It’s a hot mess….

 

[CRSKTN]

This is a small part of a larger question about autoparts produced in Mexico and Canada for which I have yet to see a coherent answer. The 3 countries have a highly-integrated auto-manufacturing system, including auto parts, larger components (such as Toyota engines) and fully-assembled vehicles that may be sold into any of the 3 countries.

One basic part, such as a crankshaft, is produced in Canada, crosses the border into the USA (potentially subject to any newly-imposed tariffs in contravention of the USMCA free-trade agreement) to be integrated into a larger component, crosses back to Canada and is further assembled here, and crosses the border again (subject to tariffs again?). I have read that 1 such basic part may cross the border 6 or 7 times (subject to tariffs each time?) before final assembly into a finished car or truck. If the vehicle is finally assembled in Canada or Mexico but sold in the USA, is it subject to tariffs one final time?

Yep. These vehicles will become completely uneconomic.
Say hello to an $80,000 economy sedan.

Markets are tanking. US just executed their auto industry and handed it to China.

Eliminating the CHIPS act will be devastating too. And the IRA.

 

[mikeavelli]

Yep. These vehicles will become completely uneconomic.
Say hello to an $80,000 economy sedan.

Markets are tanking. US just executed their auto industry and handed it to China.

Eliminating the CHIPS act will be devastating too. And the IRA.

What is insane is all these foreign OEMs have expanded manufacturing greatly here in 40 years and continue to do so based on their forecasting and knowing building here is a win/win. Most people don’t even know where the car is built they want the badge .Many foreign OEM vehicles have more American content than Domestics.

If people felt the domestics were better they would buy them. To date for the most part they still lag behind with a couple of gems here and there. Why is that?! You can’t get mad at the competition for making better products. Does he think a bunch of us gonna buy a GM or Ford all lof a sudden? Hell Stallanis owns American brands

Tariffs historically never work and only hurt consumers and the economy. You also can’t add a tariff and not drastically cut income tax If we also look at history when the government and auto lobbyists worked together we got our highway system. It was a government works project to help private.

This is very hurtful to the auto industry. Meanwhile China continues to help and subsidize their auto manufacturers.

We have been told “eat cake”
smh

 

[mmcartalk]

Most people don’t even know where the car is built they want the badge .Many foreign OEM vehicles have more American content than Domestics.

If people felt the domestics were better they would buy them.

I totally support the vehicle-tariffs on Chinese-built vehicles....and, absolutely, I want to know where a vehicle is built before I buy it. I will NOT now, or ever, buy a vehicle built in China...for many reasons. The Chinese are not a friendly country to the U.S., and have been slapping tariffs on our domestic-produced products for decades. In fact, a credible argument can be made that they are the chief economic threat to the U.S. No, it is not possible to track where all of the parts-content comes from before final-assembly (that would be too complex), but, at least, tariffs could apply to hostile countries where the final-assembly is done in their plants. Not only that, but TRUE employee-Unions are outlawed in China, and the one they have, which is a joke (ACFTU) is strictly controlled by the Communist Party.

And, at least so far, there are no tariffs on South Korea, and I hope it stays that way. A number of good vehicles are built there and shipped here, including Hyundais, Kias, Genesis, and smaller Buick/Chevy products. South Korea has a TRUE auto-workers' Union, and is a key ally of the U.S., South Korea'a tariffs on U.S.-made products is also very low...they do not try to keep our products out.

 

[mmcartalk]

Tariffs historically never work and only hurt consumers and the economy.

With all due respect, I have to disagree. In the long run, (although we might not see it overnight), I believe that tariffs, if they force prices up high enough that Americans won't buy goods produced in those countries any more, will FORCE American companies to bring manufacturing back home to the U.S., where, for the most part, the jobs should have stayed in the first place. If we, as a country, had been boycotting these Chinese-made products before, perhaps there would not be a need for the tariffs we are now seeing.

 

[mikeavelli]

I totally support the vehicle-tariffs on Chinese-built vehicles....and, absolutely, I want to know where a vehicle is built before I buy it. I will NOT now, or ever, buy a vehicle built in China...for many reasons. The Chinese are not a friendly country to the U.S., and have been slapping tariffs on our domestic-produced products for decades. In fact, a credible argument can be made that they are the chief economic threat to the U.S. No, it is not possible to track where all of the parts-content comes from before final-assembly (that would be too complex), but, at least, tariffs could apply to hostile countries where the final-assembly is done in their plants. Not only that, but TRUE employee-Unions are outlawed in China, and the one they have, which is a joke (ACFTU) is strictly controlled by the Communist Party.

And, at least so far, there are no tariffs on South Korea, and I hope it stays that way. A number of good vehicles are built there and shipped here, including Hyundais, Kias, Genesis, and smaller Buick/Chevy products. South Korea has a TRUE auto-workers' Union, and is a key ally of the U.S., South Korea'a tariffs on U.S.-made products is also very low...they do not try to keep out products out.

We are not getting Chinese cars here. How is this part of the conversation lol

 

[CRSKTN]

With all due respect, I have to disagree. In the long run, (although we might not see it overnight), I believe that tariffs, if they force prices up high enough that Americans won't buy goods produced in those countries any more, will FORCE American companies to bring manufacturing back home to the U.S., where, for the most part, the jobs should have stayed in the first place. If we, as a country, had been boycotting these Chinese-made products before, perhaps there would not be a need for the tariffs we are now seeing.

Americans are going to purchase non existant products with money they dont have?

if people could afford american made stuff, you would already be competing.

Your markets are crashing for a reason.

This is literally what caused the great depression.

You literally cannot do it domestically.
Even basic factories take years to finance build and commercialize.

I raise capital for companies including ones with complex global supply chains.

You are living in a fantasy land.

You as individuals will have less cash and everything for you will cost 10x as much.

You guys couldnt onshore toilet paper production during covid.

There is literally a documentary i recall that showed chinese companies trying to manufacture in the US.

They gave up. Even with tons of subsidies, the workers just couldnt do it.

You have believed your own propaganda.

Your economy is huge because you backdoored tech to the germans in ww2 to make fuel from coal, extending the war, and you waited til all your industrial competition was bombed out and rediverted to war efforts, all the capital and experts fleed europe, enticed by the aforementioned flow of capital and the chance to go to a safe "neutral" country. Then you sold you military support and reconstruction efforts on extortive loans to the allies, denominated in USD to make you a reserve currency including for the majority of global energy contracts.

Then you used your military to destroy literally dozens and dozens of innocent countries, anyone who could compete or form their own petrocurrency was killed, democracies couped for their resources. El

An amazon employee doesnt make more than a doctor does in some countries because they're amazing beings. Its because you have to live in the same neighborhood as a giant serial killing bank robber and life is expensive here as a result.