Japan Automakers Seen Facing Blow from Trump's Canada Tariff Hike

Tokyo, Aug. 26 (Jiji Press)--U.S. President Donald Trump's planned 50 pct tariff on Canadian automobiles and auto parts is poised to hit Japanese automakers, which have built production and supply chains spanning the United States, Canada and Mexico.

On Monday, Trump said that the United States will double the tariff rate to 50 pct on Jan. 1, 2027.

Japanese makers established North American production networks based on the USMCA, a free trade pact among the United States, Canada and Mexico, which exempts qualifying goods from tariffs.

But a review of the agreement, which took effect in July 2020, has dragged on, while worsening U.S.-Canada relations are another complication.

The USMCA was negotiated during Trump's first administration. Automakers, including U.S. companies, have established vehicle plants in not only the United States but also Canada and Mexico for supply to the U.S. market.

[Copyright The Jiji Press, Ltd.]