Podcast Transcript — How Trump's Tariffs Impact Automakers Around the World
On Monday, August 11, 2025, the Association of Foreign Press Correspondents in the United States (AFPC-USA) hosted a podcast in partnership with the Hinrich Foundation to discuss how the Trump administration’s tariffs are impacting automakers around the world amid heightened global trade tensions.
The episode was hosted by Paul Beckett, an Assistant Editor at The Wall Street Journal. He spoke to his former WSJ colleague Yuka Hayashi, who is currently the Washington-based Vice President at The Asia Group and a member of the firm’s Japan Practice. The conversation centered around “Tariffs hit some automakers more than others,” her latest Hinrich Foundation research published in coordination with fellow trade experts Tatsuya Sugiyama and Brandy Darling.
This podcast episode was produced in partnership with the Hinrich Foundation. AFPC-USA is solely responsible for the content of this episode. The learning takeaways for this episode can be found HERE.
Paul Beckett: Hello, I'm Paul Beckett, and this podcast is an educational program brought to you by the Association of Foreign Press Correspondents in the USA in partnership with the Hinrich Foundation. AFPC-USA is solely responsible for the content of this episode.
Now let’s set the scene. If you think about car makers, you immediately recognize national brands. Toyota is Japanese, Mercedes is German, General Motors is American, Hyundai is South Korean. But it is an industry that is incredibly global with some of the most complicated supply chains of any manufacturing sector and sales all across the world. So what does that mean when it comes to the tariffs that President Trump is imposing on almost every country overseas?
To talk about this, I'm joined by my former colleague at the Wall Street Journal, Yuka Hayashi, an expert on trade, and now Vice President of The Asia Group here in [Washington] DC. She and her colleagues have just produced a comprehensive guide to auto tariffs — everything you wanted to know about why they're not the same across the world, why that is and what it all means for consumers and for automakers across the globe. Yuka, many thanks for joining.
Yuka Hayashi: I’m glad to be here and great to be reconnected, Paul.
PB: Likewise, likewise. Nice to chat. So let's just start at the beginning. What brought this on? What prompted you to do this research?
YH: So, as Paul said, I am currently a Vice President at The Asia Group, which is a consulting firm based in Washington, DC. We work with American and global companies that do business in Asia. I'm part of the company's Japan practice. We were having a conversation with a client, which is a global company. The company itself is not in the auto industry, but they were really concerned about a few Japanese automakers that are clients of theirs because they were not sure what kind of impact these companies are going to face as a result of President Trump's auto tariffs. And we had looked at the broad impact of the tariffs on Japan's economy or industry in general, but until then, we didn't really pay attention to the impact on individual companies. So a couple of colleagues and I decided to start this project to look at [the] impact on individual auto companies from Japan, Korea and from Europe.
PB: So which countries have been the most affected? President Trump’s been on a tariff binge of late, so who got hit the hardest for autos?
YH: So we haven't really quantified exactly the size of impact, but I would say Japan, South Korea, and Germany are the countries that are hit the most.
PB: They're obviously huge. Automakers are all brands. They all have brands that we know and see on the streets every day. But I guess the point is – these are big industries in those countries, right? Is that why they care so much about what Trump is doing on tariffs, on automobiles?
YH: Exactly. That’s exactly right, Paul. So for Japan and South Korea, auto exports – exports of autos and auto parts to the United States – account for about one third of their overall exports to the United States. And for Germany, the figure is about 20%. And if you just look at Japan, the auto industry is just a very, very important part of the economy. So [the] auto industry employs about 5.5 million people in Japan. The industry represents about 2.5% of the country's GDP. By a broader measure, [the] auto industry could be as high as 10% of the GDP, if you look at the kind of trickle down effects of the industry. So it is just a very important part of Japan's economy. The numbers are pretty similar in South Korea as well. So the leaders of Japan and Korea have been very vocal in opposing the tariffs, and they have [tried] hard, very hard to try to first completely reverse the tariffs. But then at some point they started focusing on reducing the level of tariffs.
PB: That seems to put them in the same company as pretty much every other country in the world. So what would the journalists at heart — you know – give us the headlines. What were the main takeaways from your research? Which companies are most affected and why?
YH: Yes. So as we had expected, the impact diverges very, very broadly across companies. Among the companies that are hit the hardest, let's look at Mitsubishi Motors. They sell a bunch of cars in the US. They import all of the cars that they sell in the US from Japan. So all of what they bring in will be subject to the tariff. Then on the other end of the spectrum, let's look at Tesla. They build hundred percent of the cars they sell in the US. Ford Motors – they build 92% of the cars they sell in the US domestically.
Among foreign makers, big companies like Toyota and Honda build more than half of the cars they sell in the US – domestically in the US – and most of the rest are built in Mexico and Canada. Some of the cars built in those two countries are subject to the tariff. In fact, about half of the cars built in Mexico and Canada are subject to some form of tariffs. The rest are still coming into the US duty free because of the US-Mexico-Canada Free Trade Agreement (USMCA).
But among the cars that are subject to the tariff that are coming from Mexico and Canada, the amount of tariff is adjusted based on where the parts and components are built. And some of these cars have a lot of components that are actually made in the US, but these supply chains for autos are incredibly complicated, even for the cars built within North America. Some parts are made in the US, some are made in Mexico, some are made in Canada and they go back and forth. And final products can be made in Mexico or in Canada or in the US. So it's a very, very complicated situation. So people who are calculating the tariff rates are having a very complex situation. And I guess that the lawyers are making a lot of money trying to help the clients do the job.
Yuka Hayashi
PB: You can't just look at a car company and say, "That's a German car company. Germany is subject to tariffs. This is what the German car companies will pay." Because it really depends, not so much on the make of the car, but on where it is manufactured. Is that correct?
YH: That’s right, that’s right.
PB: Okay, and I remember when we were covering this with the Journal, I remember we would talk about – oh, a car made in the United States may go back and forth across the Mexican border eight times, right, before—
YH: Yes, that’s right.
PB: —it’s actually produced.
YH: Yes, that’s right. Yep.
PB: So the USMCA—”smacka” as we used to call it—that trade agreement that came in Trump’s first term – why doesn’t that just level everything and have it be a North American market where that's not subject to these tariffs? How can you both have a free trade agreement between Mexico, Canada, the United States, and companies that manufacture automobiles using a supply chain that involves those three countries? Why are they being hit? I don't quite get how you can have a trade agreement on one side and then have tariffs on those same partners on the other.
YH: So USMCA is a negotiated form of NAFTA, which has been in effect for decades. And both NAFTA and USMCA had the goal of really integrating these three markets. But in President Trump's second term, that notion appears to be changing very rapidly. And President Trump has imposed 35% on Canadian imports and 25% still remains for Mexico. That said, the USMCA is still in effect, and [out of] all the imports from both Canada and Mexico, 85% are still imported duty free.
So it's not that President Trump is imposing like [a] flat 35% on everything that comes in from Canada, but it is clear that the US now does not see these three countries as a single market. And that means that the companies we're talking about, auto companies right now, they are going to have to look at their supply chains very closely and determine what will be the best solutions for them in the coming months and years.
PB: Gotcha. So this is one that might require those lawyers you were talking about, but the USMCA was, as you said, a negotiated agreement that was ultimately ratified by Congress, right?
YH: That’s right.
PB: And these tariffs have been imposed unilaterally by the executive branch, i.e. President Trump.
YH: That’s right.
PB: So has anybody in Congress squawked that the Trump administration is effectively trampling on a negotiated and congressionally mandated agreement?
YH: Well, some lawmakers have said that trade agreements really have to go through Congress, but their voices have not had a strong enough impact to make even a dent on what President Trump is doing. And that situation has been, I wouldn't say the same, but similar — even during the Biden administration, the constitution gives Congress the power to ratify trade agreements and Congress is actually in charge of tariffs.
But the president also has the authority to implement some trade measures, particularly when the country faces war or emergency situations. And in recent years, the executive branch has been expanding its impact on trade policy and that has been true for both Democratic and Republican administrations. But in the second Trump administration, the president has really, really expanded his authority over the tariff policy, and he has been using these emergency rules in order to write and implement these rules.
So, in the case of auto tariffs, which was originally announced as 25%, the rate has been lowered to 15% for some major trading partners for the EU and for Japan and Korea, even though in the case of Japan and Korea, it has not been implemented though the agreement has been made. So the auto tariff is implemented using what we call the Section 232 of the US tariff law, and that is based on national security concerns. So, the president is basically saying that we need to impose these tariffs because foreign automakers are just flooding the US market with imports, threatening the US auto industry – therefore we need to impose these tariffs. So that was the rationale for the auto tariff and it's just one example of how the president [is] using these emergency reasons or reasons that are usually, have only been used for emergencies to implement these tariffs.
PB: I know in other tariff cases, there's always a question: Will the courts intervene to delineate these powers [or] executives? You described them, right—to check back the executive branch. And so there's a big question mark over the whole tariff regime that the Trump administration is introducing. Have any of the car makers or any of the countries affected by this gone that route, or are they just like, "It is what it is. We have to figure out how to proceed?”
YH: We are not aware. I am not aware of any case where any car maker is challenging the tariff.
PB: Okay, no problem. So let’s—
YH: But it is true that the court fight focuses on what they call the reciprocal tariff where the president is using the emergency power.
PB: So let's assume these tariffs are going to, they're going ahead. The companies have to figure it out. What is the implication for consumers? Presumably if you have a tariff added to the cost of importing a car, the car makers can suck up some of that, but eventually some of that's going to be passed on to the people buying the car. So what does it mean for your person looking to purchase a car in the United States?
YH: Yeah, so as you mentioned, for now, a lot of carmakers have been really absorbing the shock of the tariff. But eventually, if this continues, at least some of the costs will be passed onto consumers. A bunch of carmakers have already raised prices. One good example is Ferrari —
PB: No, no, no.
YH: — said they’re going to be raising the prices of their cars in the US by 10%. And the typical new —
PB: I was so… I’m sorry to interrupt you. I was so close, my savings account. Oh well, a few more years, okay.
YH: Yeah, so the typical Ferrari is sold in the US for $300,000.
PB: Oh, I know.
YH: So 10% of that is $30,000. So the tariff raised the price of a Ferrari by $30,000. For other types of cars, the increases are not as steep as for Ferraris. But say Subaru has raised the prices of its cars by $1,000 to $2,000. That's a pretty sizable increase.
PB: I would say. I had my eye on a Ferrari and then I was downgrading my aspirations to Subaru and now they’re going up that much and I don’t know where I look next. Anyway…
YH: But then, if you look at Toyota, they have raised prices of their cars by about $200 and Lexus prices [are] up by $250 or something like that, given that these cars cost what, $50,000 at least. It's really nothing. So you can argue that Toyota has been really absorbing the impact of the tariff on its own, and consumers haven't really seen the huge implications.
PB: So it's not on that one. It's not that the tariff is less, it's just that Toyota's eaten more of it.
YH: That's right. That's right. But there are companies that have been raising prices, and the longer the tariff stays, it's more likely that companies are going to gradually increase prices.
PB: So obviously the purpose of these, according to the White House, is to pull more manufacturing back to the United States. I mean, the auto industry is so global that your car could really be made anywhere and shipped to you. And that's been the case for many, many years. And if I remember, the Biden administration was trying to do something similar. I mean, as you said, you have two administrations in a row that have been trying to increase manufacturing. Could you just talk us through the arc of that? I mean, what was the Biden administration trying to do? I remember that was annoying to the Koreans in particular, and now how is it developed even more with the Trump administration into how successful has the United States been in pooling manufacturing of automobiles for the US market actually into America?
YH: So, the Biden administration did two large things that affected foreign manufacturers. One is the CHIPS Act. The CHIPS Act provided tens of billions of dollars in subsidies in order to entice semiconductor companies to build factories in the US. The program affected both American companies like Intel, but the biggest beneficiaries are TSMC, the Taiwanese maker of the most advanced chips, and Samsung from South Korea. So these companies have taken advantage of the program to get subsidies to expand production in the US.
Another big program passed under the Biden administration was the Inflation Reduction Act (IRA). Most of the money from that program targeted promoting the climate policy, and it really encouraged the shift of autos from gas powered engines to electric vehicles. So the program provided expanded subsidies for consumers to purchase electric vehicles. They also provided subsidies for companies to build battery factories in the US. So using the program, Korean battery makers have expanded and built or are building new factories. Japanese companies like Panasonic [have] been a beneficiary as well.
PB: And what does it mean for cars? What does it mean for, well, actually on the Biden side, did that have a meaningful impact? Was it around long enough to have an impact or has everything that's happened in Trump's second administration just kind of overtaken that?
YH: So the Biden administration was not too focused on the auto industry. The part of the auto industry that was affected by Biden policies [are] the shift to electric vehicles. So I believe that companies have done things to expand the production of electric vehicles in the US or in North America.
PB: Gotcha, gotcha. When you ask people about this, obviously it's looking into the future, but is this an effective way to rebuild manufacturing in the US? I mean, President Trump likes to talk about golden eras. Are we looking forward to a, or does anybody see down the line a golden era of US auto manufacturing coming as a result of this?
YH: I do believe that these tariffs are going to have an impact to get foreign automakers to increase their production in the US. And the reason for that is it's not just the tariffs that are driving these companies to make more cars in the US. The US is the largest consumer market. It's growing – growing because the population in the US is growing. The economy is very strong. That is in contrast to countries like Japan where the population has been constantly shrinking and the economy has been sluggish.
So competitive Japanese manufacturers like Toyota have been boosting production in the US, or in other parts of the world, while keeping the production in Japan steady, or maybe even letting it decline a little bit. So I would say that the tariff is only accelerating the trend that has already been in place, particularly involving companies from Japan, Korea, and I guess the picture is the same for Europe as well, the population generally declining, the economy generally weaker. So the US has been the most attractive market for these global companies.
That said, whether this is going to create a lot of great jobs for American workers or not, I think we have yet to see, because it is certain that a lot of these companies are going to be building new factories, expanding their plants, but they're going to be automated a lot. They will be able to make cars with fewer people. So, the impact on the US workforce is still not very clear.
PB: Gotcha. Yeah, I remember you think of auto manufacturers as being a sort of lunch pail job and the tool and dye shop and things, but if you go to a modern car plant, it's a jungle of robotics with a few humans at the controls, right?
YH: Yeah, that's right. And also, American workers are very expensive. We are paid very well, and benefits are very expensive in this country, like healthcare costs. So the companies would be really seriously looking to expand their production without hiring a lot of people.
PB: And if you think about the other big countries in the world that might be growing and might be attractive markets – India, China, Brazil, maybe. I mean, those are — probably – A. the average price for a car will be much less there, and B. they may have, I think they all do have their own trade regimes that are probably even more protectionist than the United States would be, even with these tariffs introduced. Is that right?
YH: Yes, that's right. So – what these companies are going to be making in the US are for US consumers and to sell to the consumers and the rest of the world, they're going to be making in other places, cheaper places [like] India – I don't know about China. I mean western companies are pulling out of China, but Toyota is going to be using factories in Japan to sell to other Asian markets.
PB: So they don't really have much choice. I mean, that's the point. If they want the sales to continue to grow, they just have to be present in the biggest market.
YH: That’s right. And I would think that the protectionist turn in the US trade policy is going to encourage other countries to adopt these protectionist policies as well in order for them to protect their own countries. So yes, it's going to be interesting how all these different dynamics are going to interact with each other to affect companies’ production strategies and supply chains.
PB: If they do want to hire more US workers, because they are opening plants in the United States, presumably at some point that starts to impact the number of workers they hire in the home markets. I mean, if you were an auto company looking to expand in the United States, you'd probably have to find a trade off and wouldn't that trade off most likely come from home? So, if you're a worker in the auto industry in Japan, South Korea, Germany, you're probably looking out at the future and feeling pretty nervous.
YH: Yes. That is why the governments of Japan, South Korea [and] Germany have been fighting very hard to minimize the impact of the US auto tariff. As I mentioned, Japan has – what was it – 5.5 million workers working in its own auto industry. So if these companies have to invest a lot of money in the US, they may be cutting back on investment in Japan itself. And the country's auto workers [have] already suffered a little bit. Even though [the] auto industry is probably the most competitive industry in Japan. Like, Nissan has been closing factories, they're now selling assets, and that is going to affect auto workers in Japan. As Japanese companies have become globalized and started building factories in the US and China, a lot of the jobs that could have stayed in Japan were created elsewhere. So yes, this is going to be bad news for Japanese auto workers, and it could have some significant implications for the domestic economy, of course, but also on the domestic politics as well.
Japan just had a national election, and to the surprise of a lot of us, this populist right wing party that has really learned lessons from the Trump movement in the US has done really, really well. They got 15 seats in the upper house of the parliament up from one or two seats. So that kind of political phenomenon we have not seen, we had not seen in Japan in the past, but we could start seeing the shift in Japan and the decline of high paying jobs in Japan, [and a] decline, [a] further slow down in the economy could accelerate that trend.
PB: Absolutely fascinating. You mentioned a little bit mostly in the context of the Biden administration, but electric vehicles, it's probably fair to say you haven't seen much support for electric vehicles from the Trump administration except when the president was trying to hawk Teslas on the White House lawn. So what does this actually mean for EVs and in the context of a sort of almost cultural shift, I'd say in the United States against them somewhat in the last eight months?
YH: So the impact of the tariff policy on EVs is still not very clear. As I mentioned, the tariff policy could be positive, for, say, Tesla, because it makes all of its cars that sell in the US – in the US. So it is not subject to tariffs, even though some of the parts are imported. So that part may be hit by tariffs, but compared to the impact that other companies are facing, the impact on Tesla is very small. So that could aid their competitiveness. But, at the same time, this whole tariff thing is coming at a time when the Trump administration's broader policies toward climate policy and also EV transition is really changing. And basically the Trump administration has been withdrawing the support for the consumers to buy EVs. So last year, if you just look at the sales number for EVs, it was a record year in the US, so we may see some decline in the future, but at this point it's just very hard to see.
PB: Fantastic. Great. I think we'll leave it there, if that's all right. Thank you so much indeed for this very erudite tour of the landscape, the global landscape for auto manufacturers in the world of Trump tariffs. So, really appreciate it. This is Paul Beckett with Yuka Hayashi of The Asia Group, and this has been a podcast and educational program brought to you by the Association of Foreign Press Correspondents in the USA in partnership with the Hinrich Foundation. Thank you for listening.
YH: Thank you, Paul. It was great speaking with you.
