Japan’s exports fall again, but a key catalyst is taking hold | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

U.S. car buyers love Japanese autos.

According to World’s Top Exports count, nearly 20% of the money U.S. consumers spent on auto imports in 2024 went to Japanese car companies. The only country with a higher percentage was Mexico.

Top auto importers to the U.S. in 2024

Mexico: 22.8%
Japan: 18.6%
South Korea: 17.3%
Canada: 12.9%
Germany: 11.7%

According to Cox Automotive data, Japan was the second-largest U.S. auto importer.

But the relationship is beneficial in both directions. Japan relies on U.S. auto exports for a significant portion of its gross domestic product.

However, Trump administration tariffs implemented earlier this year have reduced those figures in 2025, leading to a fourth straight month of declining exports from the Land of the Rising Sun.

Toyota is ready to ship its vehicles to the U.S. at a much lower tax rate.

Image source&colon; Bloomberg/Getty Images

Japan reports fourth straight month of declining exports in August

On Wednesday, Japan’s government reported that exports fell for the fourth consecutive month in August as U.S. tariffs took a toll on the country’s automotive sector.

U.S. exports fell nearly 14%, representing the largest decline since the middle of the Covid pandemic in 2021. Automobile exports fell by 28.4%, and chipmaking equipment exports fell nearly 40%.

The volume of U.S.-bound shipments fell 12% after falling 2.3% in July.

Total exports by value fell by 0.1% year over year in the month after falling 2.6% in July.

Japan also reported a 0.5% decline in China’s exports, which was slightly offset by rising exports to the rest of Asia and the European Union.

U.S. tariffs on Japanese autos fall to 15% this week

After months of negotiations and fits and starts to a trade deal, on Tuesday, September 16, the U.S. will begin formally implementing the 15% tariff rate on Japanese autos and auto parts that was reportedly agreed to earlier this summer.

Japanese passenger vehicles, light trucks, and automobile parts had been subject to a 27.5% tax, leading to a decline in Japanese exports to the U.S.

As part of the deal, Japan agreed to create a $550 billion U.S. investment fund that could scuttle the whole deal if Japan does not fund it based on the Trump administration’s investment decisions.

“There are all sorts of debates over the tariffs, but we have reached an agreement,” Japanese Prime Minister Shigeru Ishiba said in July. “There’s no point striking a deal with the U.S. without an agreement on automobile tariffs,” Japan’s lead trade negotiator Ryosei Akazawa said.

Japanese cars are top sellers in the U.S.

According to one estimate, Japan exported $40.76 billion worth of cars to the U.S. in 2024.

Toyota, Japan’s biggest automaker, sold 2.3 million vehicles in the U.S. in 2024. And it’s not the only Japanese automaker selling millions in the States.

Top-selling car brands in the U.S. in 2024 (Cox Automotive data)

GM: 2.68 million vehicles, +4.2% YoY, market share 16.5%
Toyota: 2.33 million vehicles, +3.9% YoY, market share 14.4%
Ford: 2.05 million vehicles, +3.8%, market share 12.7%
Hyundai: 1.68 million vehicles, +1.8% YoY, market share 10.6%
Honda: 1.4 million vehicles, +8.1% YoY, market share 8.4%

But Japanese brands don’t just ship cars to America; they also build them here.

Last year, Japanese auto manufacturers produced 3.28 million vehicles in the U.S.

Honda, Subaru, Nissan, Mazda, and Toyota combined employed nearly 75,000 manufacturing employees in the U.S. last year.

Japan Automobile Manufacturers Association (JAMA) says its members have spent $4.6 billion on research and development.