Last week, we delivered a powerful revelation that shattered the false narratives perpetuated by the liberal elite: the costs of Trump’s tariffs are not borne by American companies or consumers. Instead, it is the exporting nations, particularly Japan, that are absorbing these costs. The financial data demonstrates a clear trend: Japan’s passenger car export prices to North America have sharply declined, verifying that it is indeed companies like Toyota and Nissan that are paying the price for the roughly $20 billion in tariff revenue generated by the Trump administration.
Japan’s May trade data exposes the truth: car exports to the U.S. dropped 24.7% in value, despite only a 3.9% decline in volume. This indicates that Japanese automakers have resorted to drastically slashing prices to maintain their shipments, impacting their profits directly. The success of our findings was undeniable, yet the anti-Trump crowd stubbornly clung to their misguided beliefs, even when Congressman Bernie Moreno presented this evidence to the Federal Reserve chair, debunking their inflation fears.
Fast forward to today, and the truth is undeniable. Japan’s own Nikkei now confirms what we asserted all along: the Japanese auto industry has been shouldering the burden of these tariffs following Trump’s Liberation Day announcement. They originally kept prices steady but have now cut unit prices by around 20% on the year, trying to absorb the burden rather than pass it onto American consumers.
Our message is clear: Japan’s car manufacturers are not just trying—they are succeeding in absorbing these costs because any price hikes would lead to a significant drop in demand. They recognize the threat posed by domestic American automakers and lower-priced foreign competitors.
While trade negotiations between the U.S. and Japan remain stalled, Japan’s arrogance is evident as they try to demand a rollback of U.S. tariffs. Trump’s firm stance reflects his previous dealings with Japan, emphasizing that their past exploitation of American trade must end. The so-called “spoiled” Japanese traders will learn that they cannot continue to benefit at America’s expense.
We expect Trump to send formal letters soon that will outline significant tariff increases, potentially reaching 35%, due to Japan’s refusal to make necessary concessions. The response will likely be a steep rise in car prices on the Japanese side, as they can no longer absorb the financial hit. Brands like Subaru and Mitsubishi are already signaling impending price increases, acknowledging their limits in coping with costs.
This situation is dire for Japanese automakers. As they face catastrophic profit losses, they stand on the brink of crisis. The economic fallout will likely trigger unprecedented stimulus measures from the Bank of Japan, sending their currency into a tailspin.
The trade battle may soon escalate into a currency war as Japan resorts to devaluing the yen to offset tariffs. We anticipate the USD/JPY exchange rate skyrocketing as these dynamics unfold. This is just the beginning of a much larger struggle that will redefine global trade norms, and it’s clear that Trump will not back down from ensuring America’s interests are prioritized.
