Us Tariffs On Japanese Cars

last updated on

Us Tariffs On Japanese Cars

Trump May Put Tariffs On Japanese Cars

According to Moody's senior economist, Donald Trump may decide to put tariffs on the exports of Japanese cars to the USA. According to them, this could put a major risk to the economy of Japan will hurt the export sector.

Trump has already made it clear several times that they will put 10 - 20% tariffs on all the imported goods. This is done in an attempt to bridge the trade deficit of the USA.

Auto Sector May Escape Tariffs Via Investment

So, it's only natural to assume the same for Japan's biggest export, which is cars. If this happens, it could seriously affect Japan's auto sector.

However, it still remains to be seen whether Trump will go ahead with these plans or it was just election talk. Such high tariffs on all imports will fuel inflation and hurt consumer spending.

Right now, Japan is also one of the top investors in the USA. So, if the Japanese automakers make investments in the USA and move some of the production to the USA, they may escape the tariffs.

However, even if the production moves to the USA, the prices of cars will increase due to higher labor costs. Once again, it will fuel inflation in the USA.

Meanwhile, the trade war between the USA and China will resume once again. The consequence of this trade war will be widespread and will take over the whole world. And any big moves against China in the form of a trade war will also end up affecting the Japanese economy.

There's no doubt that tariffs will directly translate into higher import prices. The end result? A resurgence in inflation which was controlled by the Fed after years of strong policy control.

The BoJ may also have to increase the speeds of the rate hikes in an attempt to control the domestic inflation.

Trending Stories