Japan Finally Admits Its Carmakers Have Been Paying All Trump Tariff Costs As Trade Talks Collapse

A recent article showed that the costs of Trump's tariffs are borne by exporting nations and their manufacturers, not US companies or consumers. This was demonstrated by Japan's passenger car export prices to North America, which have plunged since the tariffs were imposed. Japan's May trade data revealed that car exports to the US declined 24.7% by value, but only 3.9% by volume, as Japanese carmakers took a hit to their profits by slashing prices. Despite this evidence, many in the financial community refused to believe that Japan was footing the bill for the tariffs. However, Japan's Nikkei has now admitted that the country's car industry has been absorbing the cost of tariffs for the past three months. Japanese automakers initially kept prices unchanged but eventually had to reduce them to maintain shipments and market share. The US-Japan trade talks have stalled, and Trump has threatened to impose higher tariffs on Japanese exports if a deal is not reached. Japan's carmakers are now considering raising prices, which could lead to a recession in Japan and force the Bank of Japan to implement stimulus measures. The situation could escalate into a currency war, with the yen potentially crashing and the US dollar strengthening. Trump is likely to become even angrier at Japan and its currency, leading to further trade tensions.