Tariff pressures force Japanese carmakers to hike prices

Japanese automakers are steadily raising vehicle prices in the United States, reflecting the impact of the 25 percent tariff on imported cars imposed by the Trump administration in April.

Toyota announced on July 1 that it will raise vehicle prices in the United States by an average of $270. Lexus, its premium brand, will see an average increase of $208 per vehicle. When combined with last month’s delivery fee increases of $71 for Toyota and $108 for Lexus, American consumers now face more than $300 in added costs when purchasing Toyota models.

Other Japanese automakers have also raised prices in the United States. Mitsubishi Motors increased its average vehicle price by 2.1 percent starting June 18, while Subaru raised prices for vehicles produced from June by as much as $2,055.

As Japanese automakers struggle to absorb the steep tariff costs, they are gradually passing them on to consumers. In response, Japan sent Economic Revitalization Minister Akazawa Ryosei to Washington as a special envoy to seek negotiations. However, many analysts say it will be difficult to reduce the current tariff rate.

In a June 29 interview with Fox News, U.S. President Donald Trump dismissed the possibility of extending mutual tariff exemptions. “I don’t think that will be necessary,” he said. “I’ll just send a letter saying, ‘Dear Mr. Japan, a 25 percent tariff is imposed on Japanese cars.’ That’s it.”


Won-Joo Lee takeoff@donga.com