‘It’s wealth destruction’: Trump’s Japan trade deal rattles U.S. automakers

‘It’s wealth destruction’: Trump’s Japan trade deal rattles U.S. automakers

>> MORNING SHOW WEEKDAYS 6 TO 10 ON MSNBC. >> THIS DEAL IS, THEY SAY, THE BIGGEST DEAL EVER MADE, BIGGEST DEAL EVER MADE. AND WE HAVE EUROPE COMING IN TOMORROW AND THE NEXT DAY. WE HAVE SOME OTHER ONES COMING IN. WE’RE DOING THINGS THAT HAVE NEVER BEEN DONE IN THIS COUNTRY BEFORE. AND OUR COUNTRY IS BECOMING VERY RICH AGAIN. AND THAT’S THE WAY IT SHOULD BE. THEY’RE NOT TAKING ADVANTAGE OF US. AND IT’S VERY GOOD. >> WELCOME BACK TO WAY TOO EARLY. IT’S 530 ON THE DOT ON THE EAST COAST HERE. 230 OUT WEST. I’M ALI VITALI. AND THAT WAS PRESIDENT TRUMP TOUTING HIS NEW TRADE DEAL WITH JAPAN, ONE OF AMERICA’S LARGEST TRADING PARTNERS. THE AGREEMENT SETS THE TARIFF RATE AT 15%, WHICH IS LOWER THAN THE 24% RATE TRUMP FIRST SOUGHT TO IMPOSE BACK IN APRIL. AND, OF COURSE, THE 25% RATE HE THREATENED. EARLIER THIS MONTH, TRUMP ANNOUNCED THE DEAL ON SOCIAL MEDIA YESTERDAY, ADDING THAT JAPAN HAS ALSO AGREED TO INVEST $550 BILLION INTO THE U.S. HE CLAIMS AMERICA WILL RECEIVE 90% OF THE PROFITS, AND THAT THIS WILL CREATE HUNDREDS OF THOUSANDS OF JOBS. MEANWHILE, TREASURY SECRETARY SCOTT BESSENT SAYS TRADE TALKS WITH CHINA WILL RESUME NEXT WEEK. WE’RE GOING TO LEARN MORE ABOUT THAT WHEN SECRETARY BESSENT JOINS MORNING JOE LATER THIS MORNING. WE’RE NOT GOING TO WANT TO MISS THAT. JOINING US NOW, SENIOR ECONOMIC REPORTER FOR AXIOS COURTNEY BROWN. SO WHAT ABOUT THIS JAPAN DEAL STICKS OUT TO YOU? IT WAS ONE OF THE KEY DEALS THAT WE WERE WAITING FOR. >> THIS IS THE BIGGEST. DEAL THAT THEY. >> HAVE ANNOUNCED. >> YET WITH. >> RESPECT TO IMPORTANCE TO THE U.S. ECONOMY. >> U.S. CONSUMERS. >> LOVE JAPANESE CARS. >> SO THAT. >> WAS SOMETHING. >> THAT WAS GOING TO. >> BE A. BIG DEAL FROM THE OUTSET. >> SO WE. >> WERE WONDERING. >> WHERE ALL. >> THE DEALS WERE. >> YESTERDAY WAS KIND OF. >> A WHIRLWIND. PRESIDENT TRUMP. >> POSTED ON TRUTH SOCIAL THAT THEY HAD. >> LANDED A DEAL. >> WITH THE PHILIPPINES. >> THE WHITE HOUSE. FINALLY RELEASED. >> A TEXT. >> OF THE. >> AGREEMENT WITH INDONESIA. >> AND THEN LATE. >> LAST NIGHT, WE. GOT THE DEAL. >> WITH JAPAN. WE HAVEN’T SEEN THE DETAILS YET, BUT THE BIG QUESTION IS. >> HOW AUTOMAKERS ARE. >> GOING TO BE TREATED. >> WE WERE TALKING EARLIER, THE. >> JAPANESE AUTOMAKERS, THEIR STOCKS. >> ARE SOARING. THIS MORNING THEY’RE HAPPY THAT THERE IS A DEAL. BUT WHAT TARIFF RATE WILL THEY BE. SUBJECT TO? BECAUSE REMEMBER THERE’S A BLANKET 25% TARIFF. >> ON FOREIGN CARS. SO WILL THEY BE SUBJECT TO THE 25%. >> OR WILL. THEY BE SUBJECT TO THE 15% TARIFF RATE? >> THAT’S GOING TO BE A KEY QUESTION, ESPECIALLY AS WE SEE JAPANESE AUTOMAKERS BUOYED BY THIS NEWS. BUT IT’S EARNINGS SEASON HERE IN THE U.S, AND U.S. AUTOMAKERS ARE HAVING AN OPPOSITE REACTION, AT LEAST IN THEIR EARNINGS FILINGS. >> EXACTLY. SO I THINK U.S. AUTOMAKERS. >> ARE LOOKING AT. >> THIS DEAL WITH JAPAN. >> AND THEY’RE LIKE, WAIT A SECOND. >> ARE THEY GETTING. >> OFF BETTER. >> THAN WE. ARE HERE? >> THEY’RE WORRIED. >> THAT THEY THAT. >> THEY. >> WILL BE SUBJECT. >> TO A HIGHER. >> TARIFF RATE. >> AS YOU MENTIONED. >> GENERAL MOTORS MOTORS RELEASED. >> EARNINGS YESTERDAY. >> WE ALSO. HEARD FROM STELLANTIS, THE MAKER. >> OF JEEP. THINGS AREN’T GOING WELL. >> IT’S STARTING TO HURT. >> WE’RE STARTING. TO SEE THE TARIFF IMPACT. AND WE’RE GOING. >> TO CONTINUE. >> TO SEE THAT OVER. >> THE. NEXT FEW WEEKS. >> IT’S MY FAVORITE. >> PART OF THE QUARTER. >> IT’S EARNINGS SEASON. WE GET TO LEARN HOW MUCH MONEY COMPANIES ARE MAKING. >> WHY THEY’RE. >> LOSING MONEY IN SOME CASES. >> AND THE. >> TARIFF STORY IS GOING TO BE A HUGE PART OF THAT. >> CONVERSATION. >> BECAUSE THE LAST TIME YOU WERE HERE, JUST A FEW WEEKS AGO, WE WERE TALKING ABOUT THE WAY THAT ECONOMISTS AND FOLKS ON WALL STREET WERE SORT OF LOOKING FOR THE WAYS THAT THE TARIFF AND TRADE WAR WAS SHOWING UP IN, WHETHER IT WAS CONSUMER REPORTS OR WITHIN COMPANIES THEMSELVES. THE IMPACT HADN’T YET TRULY BEEN FELT, IT SEEMED. IS THIS THE START OF THAT? ARE WE BEGINNING TO SEE, I MEAN, THE RESULT OF TRUMP DEFERRING A LOT OF THESE TRADE DEALS AND DEADLINES? IS IT NOW FINALLY HAPPENING? IMPACT SEASON. >> WE’RE SEEING THE PROFIT IMPACT. FOR SURE. I MEAN, SOME MIGHT. >> ARGUE WELL. >> GENERAL MOTORS. >> IS GOING. >> TO BE OKAY. THEY STILL. >> MADE PLENTY OF MONEY, BUT THEY MADE. >> LESS MONEY THAN THEY. >> WOULD HAVE IF. >> THESE. >> TARIFFS WEREN’T. >> IN PLACE. >> I MEAN. >> IT’S WEALTH. >> DESTRUCTION BECAUSE THEY’RE MAKING LESS MONEY. >> THEY HAVE LESS. >> MONEY TO INVEST IN. >> AI OR ANY OTHER. TECHNOLOGY THAT. >> WOULD MAKE. >> THEIR COMPANY. >> GROW FASTER. >> OR ALLOW THEM TO HIRE MORE EMPLOYEES. SO WHILE YOU MAY LOOK AT. GM’S ANNOUNCEMENT AND SAY, I THINK THAT’S A. >> MASSIVE COMPANY. >> THEY’RE GOING. >> TO BE FINE. >> YOU KNOW, THERE IS SOME SORT OF. EFFECT ON EVERYDAY AMERICANS. >> IF THIS. >> CONTINUES TO SHOW UP IN A IN A BIG WAY ACROSS LARGE COMPANIES. >> YEAH. AND YOU’VE GOT TO IMAGINE THAT EVEN THOUGH THE IMPACT IS DEFERRED, IT’S PROBABLY GOING TO GET WORSE BEFORE IT GETS BETTER. >> RIGHT. >> AND THERE’S ALSO. >> THERE’S ALSO JUST THE UNCERTAINTY. >> THE BIG. >> QUESTION THAT WE’VE BEEN. >> REPORTING ON. >> IS IT’S ON TWO FRONTS. RIGHT. SO THE FIRST THING IS THAT WE’RE ENTERING. >> A NEW WORLD. >> WE THOUGHT IT WAS GOING TO BE THE 10% BASELINE. >> WE’RE LEARNING THAT ACTUALLY THE NEW. >> NORMAL FOR TARIFFS IS MUCH HIGHER. WHAT DOES THAT TRANSITION. >> LOOK LIKE. >> AND THEN THE SECOND PART OF THE. >> QUESTION IS. >> THIS IT. IS THIS. >> THE. >> FINAL RATE. OR OVER THE NEXT FEW YEARS, ARE WE GOING TO BE GOING BACK AND FORTH BETWEEN TARIFF RATES? I THINK. >> THOSE ARE THE. >> TWO BIG QUESTIONS FOR CORPORATE AMERICA. >> RIGHT NOW. TWO BIG QUESTIONS FOR CORPORATE AMERICA. AND THEN OF COURSE, AS WE HAVE SECRETARY BESSANT COMING ON LATER THIS MORNING, JUST WHAT THE CONTOURS OF A CHINA DEAL EVEN MIGHT LOOK LIKE. I THINK THAT THERE’S A LOT OF QUESTIONS AROUND THAT AND WHAT THAT DEAL IS GOING TO BE, BECAUSE ONE OF THE MOST MASSIVE TRADE AGREEMENTS AND PARTNERSHIPS ON THE GLOBAL STAGE WILL HAVE A LOT OF RIPPLE EFFECTS. SO VERY INTERESTED TO HEAR WHAT HE’S GOING TO SAY ON THAT AS WELL. SENIOR ECONOMIC REPORTER FOR AXIOS COURTNEY BROWN ALWAYS LOVE HAVING YOU.

President Trump calls his new trade agreement with Japan the “biggest deal ever,” claiming it will bring $550 billion in investment and 90% of the profits to the U.S. But as Axios’ Courtenay Brown explains on Way Too Early, the deal’s details remain unclear—especially for automakers. Japanese car companies are rallying, while GM and Stellantis report losses linked to Trump’s tariff policies. 

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