End of Japanese Cars in America? Toyota & Honda’s Shocking Response to Trump’s Tariffs

End of Japanese Cars in America? Toyota & Honda’s Shocking Response to Trump’s Tariffs

detroit’s engine is powered by Japanese brands from Toyota to Subaru seven giants alone provide half a million jobs and generate 170 billion in sales in the US but now the White House is discussing imposing a 25% national security tax on these cars if the tax is implemented it won’t just affect showroom prices the entire supply chain from Ohio’s seat factories to Alabama’s steel mills will be shaken so when Washington plays this gamble who will win and who will lose we’ll delve into the details of the latest global developments together don’t forget to subscribe to our channel turn on notifications and like our videos to stay uptod date with our content the debate over a 25% tariff in the United States has gone from being an abstract diplomatic dispute to a system test that has given rise to tangible economic scenarios the tense lines reflected in the minutes of the talks between Washington and Tokyo since the end of 2024 are not only shaking the policy tables of the two capitals but also thousands of supply lines stretching from Detroit to the assembly belts of Texas from Alabama to rural Kentucky there is debate over what the practical consequences would be if the White House were to impose an additional 25% tariff on Japanese vehicles citing section 232 on the grounds that automobile imports pose a risk to national security the question echoing in morning reports from investment banks midday meetings with union representatives and evening briefings from retail finance analysts is if the seven Japanese automakers Toyota Honda Nissan Subaru Mazda Mitsubishi and Suzuki actually pull out of the US or dramatically reduce production volumes how many jobs dollars and basis points would we lose the Japanese automotive cluster’s footprint in the US is approximately $170 billion in gross sales $47 billion in added value a $1.02 trillion incillary industry cycle $93 billion in payroll and a total direct and indirect demand chain of $1.3 trillion when fuel and service expenses are included just as a two-wick table has a multiplier effect on the housing market in Turkey automobile manufacturing in the US acts as a centrifugal motor in the manufacturing industry and the manufacturing industry in other words the production shaft keeps hundreds of sectors in the same cycle from the steel factory to the logistics company from the seat upholstery workshop in Ohio to the startup writing after sales software in Las Vegas not just the sedans on the assembly line according to 2023 closing data Toyota Motor North America produced 1.25 million vehicles in the US including the lines in Texas San Antonio Kentucky Georgetown and Mississippi Blue Springs lines honda produced 970,000 vehicles at its Alabama Lincoln and Ohio Mary’sville Anna plants nissan produced 770,000 vehicles on its Tennessee Smyrna and Mississippi Canton lines subaru produced 221,000 vehicles at its Indiana Lafayette plant the Mazda Toyota joint venture produced 150,000 vehicles at its Alabama Huntsville plant and Mitsubishi although it officially ceased production at its Illinois normal plant in 2016 continues to supply 75,000 rebadged vehicles through the Alliance system when we add the imported units that reach the sales channel to the total figure the number reaches 6.32 million units in 2023 which accounts for 43.6% of the American passenger and light commercial vehicle market looking at the numbers with which Japanese brands closed their American books in the past two calendar years makes the threatening aspect of the situation even more apparent in 2022 the Toyota Lexus Group sold 2.1 million units honda Aura 1.2 2 million Nissan Infiniti 783,000 tons Subaru 556,000 Mazda 294,000 Mitsubishi 102,000 and Suzuki still sold 65,000 motor homes and motorcycles in 2023 the easing of the microchip shortage the boom in demand for mild hybrid models and rising gasoline prices fueled the compact SUV segment causing these figures to rise toyota Lexus 2.28 million honda Acura 1.34 million Nissan Infiniti 85,000 Subaru Din Mazda Oyan Mitsubishi Oxbound Suzuki Shet this year assuming an average dealer exit price of $38,650 per vehicle the total revenue from Japanese branded car and SUV sales in 2023 reached $169.7 billion the portion of this revenue returning to the US tax system as annual corporate income tax state sales tax federal payroll tax and social security contributions is approximately 24.8 billion and when including non-tariff component taxes from domestically produced parts and domestic energy and infrastructure costs incurred during manufacturing the direct tax flow rises to 31.3 billion a volume that could fund several years of education and healthcare budgets for automobile states like Ohio Alabama or Kentucky now the strategic question of can we stay in the market despite the 25% additional tariff is upending the content ratio calculation that Toyota and Honda have been accumulating since the 1980s in their investments currently the Tundra Sequoia line in San Antonio uses 65% domestic North American content the Camry RAV 4 line in Kentucky uses 72% honda’s Mary’sville Civic lines use 68% nissan’s Smyrna Rogue Pathfinder line uses 58% and Subaru Lafayette uses 52% domestic input the additional tariff not only targets finished imported units but also subjects components such as transmissions batteries and tech parts sourced from Mexico or Japan to component import thresholds meaning OEMs face double the cost impact toyota’s North American operating margin for the 2024 fiscal year is approximately 7.1% honda’s is 5.6% Nissan’s is 4.3% and Subaru’s is 8.8% imposing a 25% tariff on top of these margins could push Asian brands which are already forced to absorb the cost of hybrid engine premiums into their prices into the gross loss zone for this reason the back shoring or capeex freeze scenarios currently on the boards of strategic management have the potential to become reality so how much damage would such a wave of retrenchment cause to employment in the first instance when we cross reference data from the Bureau of Economic Analysis and the Automotive Alliance for Innovation and multiply it by the direct and indirect coefficients for each brand and facility we find that Toyota has 35 to 200 direct and 90,400 indirect jobs in the US honda has 28,100 direct and 61,000 indirect jobs nissan has 189,500 direct and 47600 indirect jobs subaru has 6,900 direct and 1,4800 indirect jobs the Mazda Toyota partnership has 4,800 direct and 9200 indirect mitsubishi currently maintains 1,700 direct and 3200 indirect jobs through its service and parts distribution channel suzuki has 900 direct and 1400 indirect jobs on its payroll when we add up the entire group we’re talking about roughly 436,000 jobs including 96,00 blue collar direct jobs 227,600 indirect jobs and 113,000 induced jobs moreover this figure does not include the 17,000 white collar workers employed in consumer credit and leasing offices such as Toyota Financial Services Honda Finance Nissan Digilend or Subaru Capital when these are included the total exceeds half a million based on the Bureau of Labor Statistics BLS 2023 average wage data the annual salary and benefits payout for this payroll amounts to 93.1 billion automobile manufacturing accounts for between 11% and 22% of total manufacturing employment in eight states therefore the withdrawal of Japanese manufacturers from production could theoretically push regional unemployment rates up by 2.6 percentage points in states with a limited labor pool like Mississippi and by 1.8 percentage points in Alabama’s industrial belt as for the risk of a sudden gap in the federal budget due to uncollected corporate taxes and payroll taxes the Congressional Budget Office estimates that in a scenario where Japanese manufacturers share of US sales falls by half within 3 years under a 25% tariff based on data from the early 1990s following the Plaza Accord revenue could fall by 18 tab and 21 billion in the 2026 collection year and by 26,28 8 billion in 2027 the table includes port and logistics fees arising from inventory and spare parts flows rail leases interstate trucking post sales technical training fees showroom rent and dealer franchise fees the cumulative tax fee premium loss over the first 3 years could reach the range of 5862 billion the Georgia Tech Logistics Institute’s multiplier model on the other hand assumes that only 40% of the claim that when Japanese capital leaves American Korean European brands will replace that volume will come true because the tariff shock on Asian manufacturers will completely inflate the supply chain and increase inventory turnover in other words half of the customers lost by the Japanese group would shift to Tesla Ford Hyundai and BMW while the other half would postpone consumption or turn to the certified used market due to high prices and installment barriers thereby reducing the final production and investment base it is also important to note the adverse effect of additional import taxes on the exchange rate japanese business leaders remain significant players in the US bond market aiming to keep the yen dollar exchange rate stable at around 150 during the new inflation period tax hikes deepen the real interest rate differential through Washington’s trade deflator disrupting free portfolio flows that would otherwise suppress the yen’s value and reduce dollar denominated reserve purchases japanese institutions hold a stock of 30-year Treasury bonds worth $1.06 trillion even a small unwinding of just five to six% of this stock would force the Fed to create additional demand for its fall coupon options which could push the 10-year Treasury yield up by 30 to 45 basis points on its own if the Davos spread reaction seen in June 2024 were to repeat in other words the 78 billion dollars in customs revenue to be gained from tariff policy rests on a delicate balance that could melt away instantly with the slightest shift in borrowing costs there is also the potential impact of the legacy of 30 years of US Japanese technical cooperation which could unravel the know-how spiral on the skilled labor side toyota production system and Honda’s flexible assembly line have brought efficiency thresholds to countless subcontractor facilities from Tennessee to Alabama with lean tools such as just in time Kaizen Anden and GMA there are 197,000 American workers in the ancillary industry who are certified in Japanese methodology if OEMs shift production volume to Mexico Canada or their own mainland suppliers will suddenly experience a reverse industrialization syndrome as their order books will be wiped clean and they will need to invest in new capital to adapt to the quality and timing requirements of European or Detroit-based OEMs this could create stress equivalent to the disappearance of 20 years of work discipline in a production culture that spans from vacuum melting lines and steel foundaries to sensor cable installers the overnight disappearance of both human resources and R&D generators of knowledge spillover will produce ripple effects from machine technician courses in North Alabama to materials engineering laboratories at Purdue University in Indiana the 0.22 percentage point annual increase in US manufacturing productivity attributed to innovation what analysts call invisible GDP first stalls and then reverses with the decline of key supplier clusters in addition to commercial and monetary parameters cultural turbulence in consumer behavior should not be underestimated three out of five hybrid cars and two out of three subcompact SUVs on the US market are Japanese branded a 25% tariff will raise the price of hybrids by around $4,400 even at the entry level this is because a significant portion of components sets such as batteries inverters electronic control units CVTs corrosion coatings and cooling systems still come from the Shizuoka region or secondary production facilities in Southeast Asia and Turkey at the moment when price flexibility intersects with gasoline indexed consumer sensitivity in the third quarter decisions like I’ll buy a used Corolla or I’ll invest my money in a diesel pickup truck instead of electric could surge at first glance in Washington the simple reflex of so US brands will take the lion’s share falters when backed by data this is because Ford GM Stalantis’ current assembly matrix is set to full electric by 2030 meaning that a return to the hybrid gasoline segment in the boom years would require sunk capital and the space for such capeex is limited in today’s balance sheets no American brand including Tesla is saying “I will set up an additional 800,000 compact SUV assembly line in 18 to 24 months.” Even if they did the new factory supply approval cycle takes an average of 22 months therefore even replacing half of the Japanese capacity with a domestic pivot would at best take until 2028 the resulting gap could chronically trigger price shocks drag the consumer confidence index down by 6 to 8 points and complicate the Fed’s soft landing plan in the inflation expectation spiral in short the 25% tariff is not just a window dressing tax on imported sedans it risks disrupting the profitable input output gears of a complex ecosystem in one fell swoop the withdrawal of Japanese giants from the US would suddenly release hundreds of thousands of jobs tens of billions in tax contributions a trillion dollar supply multiplier and an innovation catalyst into the void what appears on paper as a lower current account deficit in the export import balance will instantly push up bond yields logistics prices secondhand values consumer installments and inflation expectations in the real sector in the long run it would cause even more strategic damage if Japan’s mistake proof lean total quality production codes are replaced by high volume high inventory low flexibility manufacturing models the efficiency capital that the US industrial competitiveness has gained over 30 years would begin to melt away in the most extreme scenario even if the boards of Toyota Honda Nissan Subaru Mazda or Mitsubishi decide to shut down production due to zero demand the US automotive industry won’t grind to a halt overnight however the gears will slow down regular maintenance will be neglected and fixed maintenance costs will rise what are your thoughts on this matter please share your opinions in the comments section

#trump #trumptariffs #honda #toyota
Toyota & Honda PULL OUT of America! Trump’s Tariffs Trigger Auto Industry Collapse
End of Japanese Cars in America? Toyota & Honda’s Shocking Response to Trump’s Tariffs
Is this the end of Japanese cars in America? 🚗💥
With Trump’s proposed 25% national security tariff on imported vehicles, Toyota, Honda, Nissan, Subaru, Mazda, and Mitsubishi face a crisis that could change the U.S. auto industry forever.

In this video, we dive deep into:

✅ How Over 500,000 American jobs are at risk
✅ The $170 billion Japanese auto network now under threat
✅ Potential factory shutdowns in states like Ohio, Alabama, and Kentucky
✅ The ripple effects on steel mills, seat factories, and even U.S. Treasury bond markets
✅ Why Toyota & Honda may have no choice but to leave or scale back in America

The U.S. government is weighing a 25% tariff on Japanese vehicles, citing national security concerns. But what’s really at stake? With over 500,000 jobs, $170 billion in annual sales, and a $1.3 trillion economic footprint, Japanese automakers power much of the American auto supply chain. From Ohio’s seat factories to Alabama’s steel mills, this tariff could send shockwaves across the U.S. economy. Will Toyota, Honda, and Nissan stay or go? And who picks up the pieces if they leave?

We break down the data, the diplomacy, and the devastating consequences of a trade war that could backfire on America’s own industries.

📌 Don’t forget to subscribe, turn on notifications, and like this video to stay updated on global economic developments.

Chapter:
00:00 – Introduction: Detroit’s Engine Powered by Japan
01:00 – The $170 Billion Auto Network Under Threat
02:05 – Breaking Down the 25% Tariff Proposal
03:10 – Production Volumes and Market Share of Japanese Brands
04:15 – Tax Contributions, Jobs, and Supply Chain Footprint
05:40 – Will Japanese Automakers Stay or Leave?
06:35 – Component Cost Spiral & Hybrid Pricing Risks
07:30 – Potential Job Losses Across States
08:40 – Fiscal Fallout: Budget Gaps & Tax Revenue Impact
09:45 – Interest Rates, Bond Market Risks, and Japan’s Treasury Holdings
10:40 – The Know-How Crisis: End of “Lean Manufacturing”?
11:35 – Consumer Behavior Shift & Market Shortages
12:30 – Why the Industry Can’t Replace Japan Overnight
13:15 – Conclusion: The Real Cost of Washington’s Auto Gamble

👉 What’s your take? Will U.S. consumers and workers pay the ultimate price? Tell us in the comments!

#Toyota #Honda #TrumpTariffs #AutoIndustryCrisis #JapaneseCars #USAutoJobs #TariffImpact #EconomicNews #USJapanTrade #ManufacturingJobs #InflationRisk #SupplyChainShock