But will consumers here buy American-made Japanese cars?

It’s been a while since US President Donald Trump slapped most countries in the world with increased tariffs in the hope of balancing out his country’s various trade deficits. And since he just as quickly put a pause on the hugely disruptive taxes, countries have been trying to negotiate with the administration and reduce the pain that these large levies might inflict.

One major point of contention in the Japan-US negotiations has been the massive imbalance in car sales between the second and third biggest car-making countries in the world. Toyota alone sold over 2.3 million cars in the US last year, and around a quarter of those were imported from Japan. Conversely, the number of GM cars sold in Japan is so low I can’t even find reliable numbers about it, but the estimates I saw seem to hover around 1,000 or so per year.

While it’s fair to say there is a huge imbalance in the two car markets, it’s not the result of any specific policy keeping American cars out. Although there had been obstacles set up by the Japanese government in the past, the current situation is that they’re just not popular here, mainly because they’re too big. I’ll occasionally see an American truck on the streets of Osaka, and it usually looks comically oversized as it navigates the narrow streets here.

They could work well in the more rural areas, but the population there is small and rapidly getting smaller. American automakers seem to realize all this and don’t put much effort into the Japanese market, aside from Tesla perhaps.

▼ The only GM Japan social media account hasn’t posted in 10 years.

Still, the situation is enough to make the American side demand that something be done. However, since nothing is actively being done to prevent American car sales in Japan, it’s a difficult thing to rectify. So, Minister in Charge of Economic Revitalization of Japan Ryosei Akazawa proposed a “reverse import” (gyaku yunyu) plan at the most recent negotiation.

This means that Japanese automakers would build cars for the Japanese market — right-handed steering wheel and all — in American factories, and then ship them over to Japan. It’s a hugely roundabout way to sell Japanese cars in Japan, but apparently more favorable than the 25 percent tariff dangling over the heads of Japanese companies.

This also isn’t the first time such a scheme was implemented. Back in the late ’80s and early ’90s, at the height of Japan’s bubble economy, the US’s trade deficit with them ballooned to around US$60 billion. Back then, the US government was pressuring Japan to buy American level the playing field for cars by threatening tariffs, much like today, and a reverse import plan was put into action as a show of good faith from the Japanese side.

Honda shipped in Accord Coupes from the US, as did Toyota with their Camry wagons. The cars didn’t sell all that well, mainly because Japanese consumers didn’t trust American manufacturing as much as Japanese. Some of the Accords had novelty appeal because they were shipped with left-side steering, but overall, the scheme didn’t put a dent in the deficit, and it just fizzled out as the bubble burst and Japan’s economy sank into decades of malaise.

I suppose the potential success of this current offer would depend on whether the Trump administration remembers all this history or not. Meanwhile, readers of the news in Japan seemed to think it was a terrible idea for a variety of reasons in online comments.

“Won’t they be ridiculously expensive? No one’s going to buy them.”
“They’ll be made at a higher labor cost and then shipped long distances before selling in Japan…”
“Won’t this hurt the Japanese car and steel factory workers instead?”
“I’m assuming all the government cars will be Chevys after this.”
“The Camry is back, baby!”
“Just build more [Japanese cars at] factories in America instead of exporting them. Don’t burden us with this crap.”
“Don’t the American companies build in places like Canada and Mexico? Why are we the problem?”

It’s not sounding like reverse importing cars is a wildly popular plan at this point, with the people here at least. We’ll have to wait and see if it helps to reach a settlement in the remaining weeks of this tariff pause.

Source: Mainichi Shiimbun, Itai News, Road & Track, LA Times
Feature image: Pakutaso
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