In trying to improve American cars’ access to Japan, President Donald Trump may be overlooking the key obstacle: Japanese consumers don’t want them.
Of the 3.2 million vehicles sold this year in Japan, only 0.3 percent were American brands, according to data from Japan’s auto industry associations. In contrast, Japanese brands have a market share of about 40 percent in the U.S.
Trump said Wednesday he had reached an agreement with Japanese Prime Minister Shinzo Abe to open trade talks between the two nations. The president had threatened a 25 percent tariff on cars, seeking to deter imports and encourage more production and jobs in America. Trump, who also wants better access for U.S. cars in Japan, agreed with Abe that sanctions on auto exports won’t be applied while the talks take place.
While the U.S. currently has a 2.5 percent import tariff on passenger cars and 25 percent on trucks, Japan removed its last levies on auto imports almost four decades ago. Japan has long argued the reason for low presence of U.S. cars has nothing to do with tariffs: Japanese consumers generally perceive U.S. cars as bulky and inefficient -- minicars and other locally made fuel-saving models dominate the country’s vehicle sales.