Japanese Carmakers Cut US Export Prices Most In Nearly A Decade To Offset Trump Tariffs

The drop comes ahead of a planned 25% tariff on all Japanese imports starting Aug. 1, following earlier auto-specific levies imposed in April.
Subaru sport utility vehicles awaiting shipment are parked at a port on July 07, 2025 in Yokohama, Japan. (Photo by Tomohiro Ohsumi/Getty Images)
Subaru sport utility vehicles awaiting shipment are parked at a port on July 07, 2025 in Yokohama, Japan. (Photo by Tomohiro Ohsumi/Getty Images)
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Deepti Sri·Stocktwits
Published Jul 09, 2025 | 10:41 PM GMT-04
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Japanese carmakers cut export prices to the U.S. by a record 19.4% in June, the steepest decline since at least 2016.

The drop reflects efforts to stay competitive after U.S. President Donald Trump’s 25% auto tariffs took effect in April, even as firms absorb the cost impact, Bloomberg reported.

Companies, including Subaru, have raised some prices, but broader data show restraint, as the U.S.-bound vehicle export value fell 24.7% in May, while volume dropped only 3.9%, signaling aggressive price cuts.

The pricing strategy has raised concerns about profitability and whether automakers can sustain wage growth, a key input in the Bank of Japan’s inflation outlook. 

BOJ Governor Kazuo Ueda said last week he is closely monitoring whether the wage-price cycle holds under pressure from U.S. trade actions.

On Monday, Trump escalated tensions further, announcing 25% tariffs on all imports from Japan and South Korea, set to begin Aug. 1. 

In posts on Truth Social, Trump released letters to the leaders of both countries stating that the new tariffs would be in addition to existing sector-specific levies. 

He also noted that transshipped goods, or those rerouted through third countries, would be subject to the full tariff rate.

Trump warned that if either country retaliates with higher duties, the U.S. would respond with another 25% hike. 

On Stocktwits, the iShares MSCI Japan ETF (EWJ) saw ‘neutral’ sentiment, the SPDR S&P 500 ETF Trust (SPY) was ‘bearish’, and the Invesco QQQ Trust, Series 1 (QQQ) was ‘bullish’.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) was tagged ‘extremely bearish’, with all ETFs seeing ‘normal’ message volume.

See also: Trump Sets August 1 Start Date For 50% Copper Tariff On National Security Grounds, Vows To Reverse Biden's 'Stupidity'

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