Trump auto tariffs take aim at a pillar of Asian economies - and national pride

FOR Japan and South Korea, tariffs announced by U.S. President Donald Trump represent a blow to domestic car industries that are both economic pillars and sources of national pride.

Reuters reported shares in companies such as Japan's Toyota and Honda and South Korea's Hyundai Motor and Kia Corp fell, wiping off some US$16.5 billion in value, after Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks to take effect on April 3.

On the streets of Tokyo and Seoul, and in "motor city" Gwangju, people were concerned the levies would have a far-reaching impact, speaking to the singular role the car industry has played in the post-war economic rise of the two U.S. allies.

While car production helped transform Germany, Italy and France after World War Two, its influence in Asia has been even more profound. Automakers form the nucleus of vast networks of group companies that impact almost every facet of working life in the two countries.

In Japan, where the industry accounts for roughly 3% of gross domestic product, it is the automakers - particularly Toyota - that set the precedent for national wage increases through annual talks between unions and management.

The auto supply chain totalled around 60,000 companies as of May last year, according to research firm Teikoku Databank. The industry is broadly responsible for the employment of more than 5 million people, or 8% of the entire workforce, according to the Japan Automobile Manufacturers Association.

South Korea's car industry is its biggest employer, and cars and automotive parts account for 14% of exports. About half go to the United States.

Major airlines including Delta, United, and American Airlines, which were flying high less than two months ago on strong travel demand,

"The auto industry is the first thing that comes to mind for most people when you mention manufacturing," said Hiroshi Kojima, a 56-year-old businessman at a materials company who spoke to Reuters in central Tokyo.

"I am worried this could have a big impact on the economy and hit production of Japan's manufacturers." – March 28, 2025