Japan Faces 15% U.S. Auto Tariff Cut, Trade Deal in Effect

Starting from Tuesday, the United States will implement a 15% import tariff on cars and auto parts from Japan, as part of a trade agreement between the two countries. This move is set to take effect at 12:01 AM Eastern Daylight Time on September 16, 2025, according to guidelines issued by U.S. Customs and Border Protection. The reduced tariff rate will apply to Japanese-made passenger cars, light trucks, and auto parts that are either consumed or withdrawn from a warehouse for consumption on or after that date.

Earlier this month, U.S. President Donald Trump signed an executive order to implement the agreement, which includes a maximum 15% tariff on most Japanese products, including automobiles. Tokyo had previously urged the U.S. government to fulfill the agreement and reduce the auto tariff from 27.5%, a move seen as crucial for Japan's automotive industry, a major driver of its economy.

The automotive sector is a significant component of Japan's exports to the U.S. and serves as a pillar of employment and wage growth. The overall trade agreement also includes Japan's commitment to establish a $550 billion U.S. investment fund, a key concession that helps ensure the reduction in tariffs. However, the funding source for this investment fund has been a subject of scrutiny, with differing descriptions of the commitment from both countries. The U.S. Secretary of Commerce has warned that Japan could face higher import tariffs if funding is not provided for Trump's investment decisions.