Japanese automakers received a major boost on Friday last week after US President Donald Trump signed an executive order slashing import tariffs on Japanese cars from 27.5% to 15%. The move, part of a broader trade agreement first announced in July, is expected to ease pressure on Toyota, Honda, Nissan and their finance arms, which had warned of steep losses under the previous tariff regime.
The agreement, first outlined in July, extends the 15% levy to nearly all Japanese exports to the US, including vehicles and pharmaceuticals. In return, Japan will invest $550 billion in US infrastructure and technology, and commit to $8 billion in annual purchases of American goods, including agricultural products and bioethanol. A notable concession includes a 75% increase in US rice imports, previously resisted by Tokyo to protect domestic producers.
For motor finance providers, the tariff rollback reduces uncertainty around vehicle pricing, residual value forecasting, and leasing volumes. Toyota alone had projected a $10 billion hit under the previous tariff regime, underscoring the scale of risk facing captive finance operations.
Shares in Japanese automakers and Tier 1 suppliers rallied in Tokyo following the announcement on Friday, signalling renewed confidence across the automotive value chain. With cars accounting for roughly 20% of Japan’s total exports, and the US as its largest market, the tariff cut is expected to stabilise cross-border flows and support financing activity tied to new vehicle imports.
Mark McCarthy, CRO at Basware, a software developer based in Finland, noted that “tariff uncertainty introduces volatility into the global economy,” adding that enterprises with complex supply chains may now reassess strategic priorities and refocus IT investments to drive cost efficiency and mitigate operational risk.
Compliance experts also flagged emerging risks. Michael Joseph of Napier AI, a UK-based software developer, warned that “fluctuating tariffs… have created unintended consequences,” including new vulnerabilities for financial crime as supply chains reorganise. For motor finance firms, this means adapting risk frameworks to account for shifting trade patterns and jurisdictional exposure.
“US-Japan tariff cut signals relief for OEMs and motor finance sector” was originally created and published by Motor Finance Online, a GlobalData owned brand.
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