Trump Tells Japan 'You’re Paying 25%' As Auto Tariff Standoff Escalates Before Deadline

U.S. President Donald Trump on Sunday called trade with Japan unfair and floated the possibility of maintaining a 25% tariff on autos.

The move raises stakes just over a week before sweeping tariff hikes are set to take effect on multiple U.S. trading partners.

They won’t take our cars, and yet we take millions of theirs, Trump said in a Fox News interview, adding that Japan could help reduce the trade imbalance by importing more American oil and other goods. 

“Dear Mr. Japan, here’s the story. You’re going to pay a 25% tariff on your cars,” he added, according to a Bloomberg report. 

The warning came as negotiations with Japan remain unresolved ahead of the July 9 deadline, when temporary tariff relief offered to dozens of countries is set to expire. 

Without new trade deals in place, many nations, including Japan, face the risk of U.S. duties jumping from the current 10% baseline to as high as 24%, with autos among the most sensitive sectors.

Trump’s remarks followed another round of bilateral talks in Washington between Japan’s chief trade negotiator Ryosei Akazawa and U.S. Commerce Secretary Howard Lutnick. 

While the pair held one in-person meeting, two follow-up conversations took place by phone. 

Japan has strongly objected to the auto tariff, noting that its car industry has invested over $60 billion in the U.S. and created 2.3 million local jobs.

Japan has called for a comprehensive agreement that includes sector-specific tariff relief. 

So far, however, only partial deals with the UK and China have been struck, and statements from both Washington and Tokyo over the weekend described the latest round of U.S.–Japan talks as “fruitful” without offering details or indicating a breakthrough.

Auto-related stocks on Tokyo’s Topix index slipped as much as 0.5% on Monday, underperforming a 1.6% gain in the broader Nikkei 225 index, reflecting investor concern that a deal may not materialize in time.

Meanwhile, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, is up 5.2% year-to-date, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq-100, has gained 7.4%. 

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is up 3.4%.

On Stocktwits, retail sentiment was ‘bullish’ for SPY, Nikkei 225, and DIA with ‘normal’ message volume, while sentiment for QQQ was ‘bearish’ amid ‘high’ message volume.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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