Japanese Carmakers Vow To Sustain Wage Growth As Trump's Trade Deal Slashes Auto Tariffs

Japanese automakers pledged to keep wage growth on track after the U.S. and Japan finalized a trade deal that slashed tariffs on cars, light trucks and auto parts to 15% from 27.5%, easing pressure on one of Japan's most important export sectors.

Japan Automobile Manufacturers Association chair Masanori Katayama said Wednesday the industry would“wholeheartedly strive to ensure the virtuous cycle of wage increases continues,” speaking in Tokyo alongside chief negotiator Ryosei Akazawa, who led the July 22 deal, Bloomberg reported.

Akazawa said the compromise“managed to hold our ground at the very last moment” and urged carmakers to back a $550 billion U.S. investment fund tied to the accord.

The executive order signed by President Donald Trump on Sept. 4 set the new 15% baseline duty on Japanese auto imports starting Tuesday, with separate treatment for aerospace products. 

Tokyo agreed to offset measures, including the procurement of 100 Boeing aircraft, increased purchases of U.S. farm and defense goods, and discussions on an Alaskan LNG offtake deal.

Meanwhile, trade data show Japan's car exports to the U.S. fell in August, with shipment value down 28.4% and volumes off 9.5%, as automakers cut prices to defend market share. Toyota, which had warned of a $10 billion profit hit from higher levies, said the new framework provides“much-needed clarity” for the industry.

On Stocktwits, retail sentiment leaned 'bullish' for the SPDR S & P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ), both seeing 'normal' message volume, while the iShares MSCI Japan ETF (EWJ) drew a more 'neutral' stance from traders amid 'low' activity.

So far this year, SPY has gained 13.3% and QQQ is up 15.9%, while EWJ has outperformed both with a 22.2% rise.

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