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Japan has finally secured a massive trade deal with the US, slashing auto tariffs, unlocking a $550 billion investment, and sending shock waves through global markets. Stocks surged. Investors cheered. But behind the headlines, Detroit is fuming. General Motors, Ford, and Stalantis say this deal puts them at a serious disadvantage. And with Trump eyeing similar agreements with Europe and Asia, the pressure is mounting fast. So, what does this mean for US industry, global trade alliances, and the balance of power? In this video, we’re breaking it all down. Who’s winning? Who’s losing? And what’s coming next as Washington redraws the global trade map. Hit the like and subscribe button and let’s dive in. The new US Japan trade agreement reduces tariffs on imported automobiles from a crushing 27.5% down to a more competitive 15%. At first glance, this appears beneficial for all parties, particularly investors. But while financial markets welcomed the move, American automakers reacted with clear dissatisfaction. The pact also secures a massive 550 billion commitment from Japan to invest in US industries, including liqufied natural gas, Boeing aircraft, semiconductor production, and defense manufacturing. President Trump hailed it as the largest deal ever, claiming 90% of the economic gains would flow to America under his policies. That was done with Japan. and they had their top people here and uh we worked on it long and hard and it’s a great deal for everybody. However, major US car manufacturers General Motors, Ford and Stalantis, parent company of Chrysler, expressed strong objections. The core issue, they continue facing 25 to 30% import duties on vehicles assembled in their Mexican and Canadian factories. This puts them at a disadvantage against Japanese automakers whose vehicles contain minimal US-made components, yet now qualify for reduced tariff rates. Compounding the problem, existing 50% tariffs on foreign steel and aluminium further widen the production cost disparity. The American Automotive Policy Council condemned the agreement as a major advantage for foreign competitors. Conversely, Trump administration officials framed it as a transformative economic achievement. Given Wall Street’s enthusiastic response, international markets similarly viewed the deal as a positive development. Financial markets soared as soon as the news hit. Japan’s Nikki 225 rose 3.5% and the Topics reached an all-time high of 2,982. European car makers like Porsche and BMW gained 4 to 7% in stock value. Even US markets edged higher with the SNP500 ending at a record 6,358.91. What sparked the excitement? Clarity. Investors had worried about a trade crisis on August 1st, the day many thought Trump’s proposed 25 to 35% tariffs would hit key trade partners. But the Japan deal hinted at a smoother outcome, setting what traders now see as the likely global standard tariff rate of 10 to 15%. Volvo car stock jumped over 10% on hopes that the EU and South Korea could secure similar deals. Even the US dollar, which had fallen recently, stabilized near 97.5 as trade hopes grew. Markets also found relief in inflation. With trade pressures easing, long-term US inflation forecast dipped slightly, hinting the Fed might have flexibility later this year. But not everyone benefited, especially in Detroit. Here’s why automakers are unhappy. American automakers are furious, and it’s more than just hurt feelings. The big three claim the Japan deal puts them at a disadvantage. Cars made in Mexico or Canada, often using more US parts, still get hit with a 25% tariff. Meanwhile, Japanese imports with barely any US content, now enter at just 15%. GM, which makes 36% of its North American vehicles in Mexico and Canada, lost $1.1 billion in Q2 alone due to tariffs. It warned losses could reach $5 billion by year end. Good morning, Mary joining us from GM’s headquarters in Detroit. Mary, I want to ask you about Stalantis reported $352 million in tariff losses over 6 months. Ford, less affected thanks to its US-based production, still raised concerns. The United Auto Workers Union slammed the deal as a betrayal of American workers. They fear job losses, especially since Japan imports only about 6% of its cars and has long kept US automakers out with strict rules and buyer preferences. The AAPC’s president called it a bad deal for US industry and workers. Detroit’s message is clear. This deal doesn’t fix the imbalance, it makes it worse. So, who suffered the most once the excitement faded? Let’s look at the biggest losers. General Motors took the worst blow. Its stock jumped 9% at first as investors cheered, but the celebration didn’t last. Reality hit 1.1 billion in Q2 tariff losses, a 32% profit plunge, and warnings of tougher times ahead. GM had to cut its yearly profit forecast by over $2 billion. Stalantis, Jeep, Chrysler, Dodge didn’t escape either. Their US sales fell 10% last quarter. The company absorbed €300 million in tariff costs and cut production on several models as expenses soared. Even Ford isn’t safe. While most of its cars are US-made, the deal lets more Japanese cars flood American markets without giving US automakers better access to Japan. American car exports to Japan. Still practically zero. The pain spreads to suppliers, too. Last year, US parts makers shipped $35.8 billion to Mexico and $28.4 4 billion to Canada, but just $1.5 billion to Japan. Any slowdown in North American production threatens over 500,000 US parts jobs, which ultimately means companies tied to North American supply chains now face tougher tariff rules than overseas rivals. But while some struggle after the deal, others are cashing in. Japanese car makers are the clear winners of the deal. Toyota, Honda, Mazda, and Subaru saw their stocks jump some by more than 14%. Japan sent 1.3 million cars to the US last year, and this tariff cut will boost that flow. Toyota, which shipped around 500,000 vehicles from Japan in 2024, will save millions in fees. Mazda’s stock rose 17% in Tokyo. Honda and Nissan followed closely. These brands can now compete harder on price in the US, putting pressure on American automakers. Japan’s economy also got a lift. With the yen falling and exports looking up, the Nikki reached its highest level in over a year. Japan’s $550 billion US investment pledge should create jobs and improve infrastructure, especially in key areas like chips, LNG, and pharmaceuticals. In metals, silver hit $39.35 an ounce, a 14-year high thanks to industrial demand and trade optimism. Central banks are also buying more gold, expecting a weaker dollar in global uncertainty. The real question now is what’s next? Who’s negotiating? And where is this trend heading? The Japan deal isn’t just a one-off. It’s a domino. The European Union is racing to strike a similar agreement before Trump’s August 1 deadline. Talks suggest a 15% baseline tariff may be the compromise. Germany and France are already in emergency talks with the US, and European diplomats admit they’re holding their noses at the terms, but ready to sign. South Korea, Indonesia, and the Philippines are already in the mix. South Korea’s envoy is on the way to Washington. Indonesia and the Philippines have struck 19% frameworks. Even China is lining up talks with a possible extension of its August 12th deadline for its own deal. Markets expect more deals and soon. But US automakers want one thing, tariff parody. Until there’s balance, the risk is that foreignbuilt vehicles enjoy cost advantages that domestic companies can’t match. Meanwhile, dd dollararization trends continue. Central banks are buying gold. Investors are hedging against a volatile dollar and a politicized Fed. With Powell under fire and interest rate cuts pushed back, gold and silver are drawing safe haven demand. The trade chess board is being reset. Japan just made the first move. Now the rest of the world is scrambling to respond. So while Wall Street rallies and Tokyo celebrates, Detroit is bracing for a tougher fight. The Japan deal might be just the first domino. Europe, South Korea, and even China are rushing to secure their own terms before tariffs snap back hard. But if these deals keep favoring foreign imports over US-built goods, automakers at home could face serious fallout. Trump’s trade playbook is bold, but it comes with risks. Will the White House strike a balance before it’s too late? Or are we heading into a trade shakeup that redefineses global competition for years? Drop your thoughts in the comments. Hit like and subscribe for more sharp updates. See you next time.
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Japan trade deal sparks hope for US investors, frustration for automakers
The recent Japan trade deal has stirred both optimism and concern, highlighting a significant shift in the US Japan agreement. This latest trade deal news brings a noticeable US investors reaction, with many seeing an investor confidence boost. Meanwhile, there is growing automakers frustration due to the auto industry impact and rising automotive trade concerns. The Japan US trade agreement aligns with evolving global trade policy, affecting Japan auto exports and prompting a deeper trade relations update. The US Japan auto trade debate now reflects broader US economy news and international trade impact. While Japan adjusts its economic policy, trade news updates show rising US trade concerns. The auto industry response emphasizes the global economy effects and underlines key trade market analysis. As US investment outlook strengthens, car industry frustration over the Japan trade agreement signals ongoing challenges and opportunities in international markets.
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