Just when American carmakers thought they were getting a break from high tariffs, a surprise move by the White House left them reeling.
On Tuesday night, President Donald Trump announced a new trade agreement with Japan—and U.S. automakers are anything but thrilled.
The deal slashes tariffs on Japanese imports, including vehicles and car parts, to 15 percent.
While that might sound like a win for international cooperation, American companies are fuming over what they see as an unfair advantage handed to their foreign competitors.
Detroit’s Big Three Say They’re Getting Burned
The new tariff policy has landed like a punch to the gut for the Detroit Big Three—General Motors, Ford, and Chrysler (under Stellantis).
While the White House had long pitched tariffs as a way to revive U.S. manufacturing, American automakers argue it’s doing the opposite.
Matt Blunt, who heads the American Automotive Policy Council, didn’t hold back.
In a statement, he slammed the deal as a “bad one” for U.S. workers and the industry.
His main gripe? Japanese-built cars now face lower tariffs than the parts American companies need to import for building their vehicles on home soil.
Trump Claims It’s a Historic Deal
In contrast, President Trump is hailing the agreement as a monumental achievement.
Speaking from the East Room of the White House, he called it “the largest trade deal in history,” insisting it would bring “hundreds of thousands of jobs” to the U.S.
The deal also includes a promise from Japan to buy 100 Boeing planes and to boost its defense spending with U.S. firms by $3 billion annually—on top of the $14 billion spent last year.
So while defense and aerospace industries are celebrating, the auto world is far less enthusiastic.
Soaring Stocks in Tokyo, Sinking Spirits in Michigan
The biggest winners? Japanese car brands.
As soon as the deal was announced, shares for Toyota, Honda, Mazda, and Nissan jumped on Wall Street.
Toyota stock alone shot up 13 percent by Wednesday morning.
For U.S. automakers, though, the timing couldn’t be worse.
General Motors just reported a $1.1 billion drop in quarterly income.
Stellantis said it lost $2.68 billion in the first half of 2025, including $350 million spent on tariffs.
Executives say they simply can’t avoid these extra costs—even though a majority of their production is already U.S.-based.
Ford’s CEO Breaks Down the Problem
Ford’s CEO, Jim Farley, laid it out clearly in an interview.
A typical $40,000 to $50,000 Ford F-150 pickup is about 75 to 80 percent American-made, but certain parts just aren’t available in the U.S.—things like fasteners, washers, and even carpets.
So, companies are stuck importing those parts and paying higher tariffs than their Japanese rivals who import fully assembled cars.
Where Are the Promised Manufacturing Jobs?
Another sticking point is the lack of job growth.
Despite claims that tariffs would supercharge American manufacturing, the numbers tell a different story.
Between May and June, the U.S. lost 14,000 manufacturing jobs—even while other industries were adding workers.
It’s a frustrating picture for automakers under pressure to expand domestically, while their bottom lines get squeezed tighter.
Car Prices Could Still Rise for Buyers
Unfortunately for consumers, this deal won’t necessarily bring down car prices.
Erin Keating, an analyst with Cox Automotive, says tariffs—reduced or not—are still contributing to rising costs.
One example? “Destination charges,” the fees for getting a car to the dealership, have gone up since April.
And with automakers preparing to roll out their 2026 models this fall, price hikes are practically guaranteed.
Fall dealership refreshes are typically when sticker prices jump.
The Sedan Surprise: Why Japan Still Wins
One reason Japanese automakers might keep winning? They’ve held onto their sedan models.
Brands like Toyota and Honda still offer popular, affordable sedans like the Camry and Civic—vehicles that continue to appeal to budget-conscious buyers.
Meanwhile, GM, Ford, and Stellantis have moved away from sedans in favor of SUVs and trucks, leaving them more vulnerable in a market still hungry for smaller, affordable cars.
A Mixed Bag of Winners and Losers
So where does this leave the U.S. auto industry? Feeling left behind.
While President Trump celebrates the deal as a global success, American automakers see mounting costs, fewer jobs, and an uneven playing field.
For Japan, it’s a major win. For Detroit, it might be time to rethink the game plan.