The Japan tariff myth that just won’t die
It’s no mystery as to why Japanese streets are empty of U.S. cars
Donald Trump’s complaints about Japan’s auto market are based on misconceptions, as Japan has not imposed car tariffs since 1978 and American cars fail to meet local preferences. | Bloomberg
By Gearoid Reidy
Bloomberg
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Apr 8, 2025
Prime Minister Shigeru Ishiba is forming a team to forge a tariff deal with U.S. President Donald Trump after the two spoke by phone on Monday, following one of the worst days for Tokyo stocks in recent memory. But behind the scenes, Ishiba has been saying that he doesn’t know who he needs to speak with in order to talk sense to his U.S. counterpart.
It’s not hard to see why, given recent remarks from the American side. Just take one example of Trump’s comments on a favored topic: auto sales.
"Toyota sells 1 million foreign-made automobiles into the United States and General Motors sells almost none” in Japan in return, Trump said last week, laying out his tariff regime. "Ford sells very little. None of our companies are allowed to go into other countries,” he added, blasting "nonmonetary restrictions” that Tokyo and others supposedly impose. After speaking to Ishiba, Trump reiterated the point in a post on Truth Social, saying that "They don’t take our cars, but we take MILLIONS of theirs!”
His deputy chief of staff, Stephen Miller, was even more pointed in a post on X. "Why are American streets filled with cars from Europe and Japan but their streets are empty of American cars?” he asked. In a follow-up, he said countries like Japan "have shut their markets to our cars while our market has been flooded with theirs.”
That GM and Ford sell very little in Japan is true — GM shifted around 1,000 units in the fiscal year ended last month, with Ford at fewer than 200. Yet the belief that unfair trade practices are at fault isn’t only false, but also one of those enduring myths that refuses to die.
Even before Trump, Japan already levied less than the 2.5% tariff on vehicle imports the U.S. charges. How much less? Nothing, in fact — Tokyo hasn’t imposed tariffs on car imports since 1978. The country indeed had barriers to clear in the past, but those haven’t existed for years. Other impediments have been broken down since, leaving generations of lawmakers scratching their heads over U.S. complaints about market access. The source of their grievance is, in reality, something far simpler: The cars aren’t good enough.
American companies have simply failed to produce cars that appeal to local tastes. Japanese drivers want compact, fuel-efficient vehicles that balance excellent safety and reliability with superior value for money. Forget U.S. manufacturers, it’s hard enough for most domestic makers to compete with these demands, which is why Toyota Motor is responsible for one out of every two cars sold in the country.
Furthermore, fully one-third of sales are "kei cars," ultralight vehicles with small engines that are taxed at a lower rate. It’s a category no U.S. maker even builds. The most popular American autos, meanwhile, are simply too big for Japanese roads and parking spaces. Some versions of the Ford F-150, long the top-selling vehicle in the U.S., are so ludicrously large they can’t even be driven in the country with a standard driver’s license.
It’s also common to see foreign cars in Japan — they just need to offer something that local manufacturers can’t. That’s why foreign brands dominate the luxury market: Mercedes-Benz Group sold more than 50,000 vehicles last year, while BMW and Volkswagen are also successful. While European cars have cultivated a high-end image, American cars come with an inferior reputation. That judgment could be overcome if U.S. automakers were willing to put the work in, but they rarely are. Tesla may be one exception, with its vehicles an increasingly common sight in wealthy neighborhoods, but the company doesn’t provide sales data.
Ironically, it seems from complaints like Miller’s that the Trump administration, usually known for its opposition to diversity, equity and inclusion and other alleged "woke” initiatives, seems not to want equality of access — but rather equity in the form of equal outcomes.
Cars might be the most enduring example of the narrative of closed access, but it’s far from the only one. Trump once sideswiped Japanese consumers’ supposed preference for domestically produced TVs in comments criticizing the security alliance with Tokyo: "If we’re attacked, Japan doesn’t have to help us at all, they can watch it on a Sony television,” he said in 2019.
But the stereotype no longer applies: Now, more than half the TVs sold in Japan are Chinese made. Once mocked for their poor quality, these brands have begun to win over local consumers with their strong value for money. Sony’s domestic share has tumbled to fourth, with less than 10% of a market dominated by Hisense Home Appliances and TCL Technology.
A similar story once existed around the mobile phone market. Executives from Vodafone, during its brief dalliance in Japan in the early 2000s, were baffled when consumers didn’t gravitate to their otherwise successful strategy rolled out in other countries. Commentators at the time frequently landed on some illogical patriotic preference for Japanese-made devices, rather than acknowledge that Vodafone hadn’t understood local tastes. The reasoning ran out of runway a few years later when Apple displaced almost all domestic handset suppliers with its iPhone — which, 15 years later, still has 50% of the market despite the weak yen making its devices extremely expensive.
When you scratch the surface of what executives and politicians often call "informal barriers” or "nonmonetary restrictions,” you often just find frustration that the regional market is tough, with nimbler rivals who better understand esoteric preferences. Customers are incredibly demanding and their choices often diverge from global trends — which should be no surprise in a large, advanced economy with quite different cultural foundations to the West.
But from Walt Disney to LVMH and McDonald’s to TikTok, Japanese shoppers have no objection to buying foreign. It’s just that these companies have put in the effort to suit their tastes, sometimes over decades. Whether Ishiba can persuade Trump of that argument — or whether logical arguments even make a difference — is another issue entirely.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas.
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Charles James
Imagine steering a Ford F350 through the narrow streets in most Japanese streets. Can’t be done.
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George Savino
Indeed. Most cars are better than American made cars.
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Erin Moore
Let’s analyze thus:
1. Japanese drive on the left side of the road therefore they require right-hand drive vehicles. USA auto manufacturers in the USA do not make for export right-hand drive vehicles. NB: Ford UK does manufacture right-hand drive vehicles for sale in the UK but very few of those are exported to Japan.
2. Outside the expressways, most Japanese roads are narrow. USA manufactured vehicles tend to be much larger in width and therefore incompatible with Japanese roadways. A Chevrolet Suburban could not traverse Kamakura city streets.
3. Japanese vehicles are taxed by engine displacement and vehicle weight. USA designed and manufactured vehicles are heavier with larger engines, making the tax burden of registration and ownership in Japan too steep.
In sum, except for Ford UK, no USA legacy automaker has been interested in designing and building cars suitable for ownership and driving in Japan (or Europe or Australia). Hence, no an extremely limited export market for Ford, Chevy, Dodge, Jeep, etc.
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Nikos Calfacacos
Tariffs is not about quality. Now.
Japan has zero duty on automobiles. So I challenge you: since you think American cars are no good, take a European car and bring it to Japan. A parallel import, so you make sure that it is fully compliant. then come back here and tell everybody how much you paid to put it on the road in Japan. You will freak out. Then include it in your article. This is Japan's non tarrif barriers.
Now take the same car back to Europe. You can drive the car right off the boat for as long as your visa lasts The shaken will cost you €70.
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Jason Garrett
Here are some simple facts.
The only American vehicles that are objectively best in their class are full-size trucks. Japan has no need for full-size trucks and no space for them.
For sedans? There are FAR better Japanese models.
Crossovers? Far better Japanese models
Compact? Obviously Japanese are far better.
Vans? Again, Japan has better vans than anything America could ever make.
It's really simple, but cultists are often brainwashed to believe that everything they do is the best and they fall for it.
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Luigi Stranieri
This narrative is tiring. To sell cars in another country you should tie collaboration with local brands and invest money in auto dealers shops. You don’t sell cars at the supermarket. If American brands want really sell to Japan they had to invest mon… See more
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Steven Simon
Simon says the Trump tariffs are here whether you like it or not & Japan's parasitic relationship with the US is OVER!😇
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Victor Dolphin
Why are American sushi and ramen not typically found in Japan? 😤
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