Trump Strikes Japan Tariff Deal as Auto Stocks Surge

Trump Strikes Japan Tariff Deal as Auto Stocks Surge originally appeared on Autoblog.

President Donald Trump’s trade team has struck a surprise deal with Japan, dialing back planned automotive tariffs and sparking a rally in Asian car stocks. It’s a rare de-escalation in what’s been a relentless tariff campaign — and one that’s given automakers a brief moment of relief in a market defined by cost hikes and constant reshuffling.According toReuters, the agreement includes dropping planned duties that were scheduled to hit Japanese auto exports on August 1, with Tokyo promising $550 billion in investment and lending to the U.S. economy in return. It’s a symbolic win for both nations, and shares of Honda and Toyota responded immediately — jumping 11% and 14%, respectively, on the Tokyo stock exchange.

Still Trump’s Trade War

That said, this truce doesn’t change Trump’s broader economic doctrine. He’s stillvery muchinto tariffs — especially on foreign autos and raw materials. Earlier this month, he proposed a 50% duty on foreign copper, prompting warnings thatnew vehicles could cost thousands more. And he’s shown little interest in backing down from his“America First” tariff plans for Europe, even as EU leaders plead for exemptions.Japan was a specific fixation. Trump recently described the U.S.–Japan automotive relationship as“unfair”, slamming the trade imbalance and accusing Tokyo of blocking American vehicle imports while flooding U.S. dealerships with Japanese models. The new deal doesn’t entirely reset that rhetoric, but it does signal a temporary pivot — or at least a transactional pause.

Automakers Are Still Rearranging

Despite the apparent good news, global carmakers remain spooked. Volvo, for example, is slashing its U.S. lineup, pulling sedans and wagons off the table to avoid high tariffs and refocus on more profitable crossover models. The company cited Trump’s import penalties as a key reason for the pivot, acknowledging that it’s simply not sustainable to keep shipping a broad model range into an increasingly closed market.This shows the bigger issue: even with temporary tariff relief, the long-term policy instability is forcing automakers to rethink their U.S. strategies entirely. Any deal could be undone. Any exemption could expire. Production is shifting, portfolios are shrinking, and prices are climbing.

A Deal With Strings

For now, the White House will likely frame the Japan deal as proof that its hardline tactics are working. And in fairness, there are real short-term benefits: consumer prices could drop slightly, Japanese automakers avoid immediate cost shocks, and Wall Street seems reassured.But the broader auto industry is still on edge. Trump’s tariff-heavy playbook remains very much in force, and unless there’s a structural change in how trade policy is approached, we’re likely to see more disruptions, more supply chain headaches, and more cars with inflated stickers.

Trump Strikes Japan Tariff Deal as Auto Stocks Surge first appeared on Autoblog on Jul 23, 2025

This story was originally reported by Autoblog on Jul 23, 2025, where it first appeared.