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Japan's Auto Sector Is Poised to Weather a U.S. Tariff Storm

Sep 3, 2018 | 09:00 GMT
Workers in Toyota City in Japan's Aichi prefecture assemble a Prius. Japan's auto manufacturing sector is heavily export-driven, and the United States is a prime destination for its cars.

Workers in Toyota City in Japan's Aichi prefecture assemble a Prius. Japan's auto manufacturing sector is heavily export-driven, and the United States is a prime destination for its cars.

(TOSHIFUMI KITAMURA/AFP/Getty Images)

For more than four decades, automobile manufacturing has been a key pillar of Japan's industrial sector. And today, auto exports remain a mainstay of the Japanese export economy, with exports to the United States accounting for a significant share. As with all other exporters who ship autos into the U.S. market, Japan's carmakers are facing down the threat of a tariff of up to 25 percent on their products. But unlike some other auto-exporting countries, Japan, which has car manufacturing operations spread across the continental United States, is positioned to absorb some of the damage that auto tariffs could bring. Citing concerns about national security, the White House has considered the auto tariffs as it aims to reduce the overall trade deficit and shore up the U.S. domestic auto sector. The U.S. trade imbalance with Japan, a target of Donald Trump's ire long before he became president, totaled $72 billion in...

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