3 Automakers to Buy on U.S.-Japan Trade Deal—Not Who You Expect

Trade Agreement Overview - The United States and Japan have reached a new trade agreement, establishing a 15% tariff rate on Japanese imports into the U.S., significantly lower than the previously scheduled 27.5% rate [1][2] - The market reacted positively, particularly benefiting Japanese car manufacturers, whose stocks surged following the announcement [7] Impact on U.S. Automakers - U.S. automakers, represented by the American Automotive Policy Council, expressed dissatisfaction with the deal, arguing it disadvantages American-made vehicles by imposing higher tariffs on them compared to Japanese imports [3][4] - The deal is perceived as unfavorable for U.S. manufacturers, especially those with significant production in Canada and Mexico, as they may face higher import levies [4][5] Japanese Automakers' Performance - Japanese automakers have seen a significant rise in stock prices, with some companies experiencing increases of over 10% following the trade deal announcement [7] - Honda Motor Co. is highlighted as a strong performer, with shares up nearly 16% year-to-date, benefiting from its manufacturing presence in the U.S. and Japan [9] - Subaru Corp. received an upgrade from analysts at Goldman Sachs, reflecting its proactive tariff mitigation strategies and strong brand loyalty [11][12] - Toyota Motor Corp. also experienced a stock rally of more than 10%, as the company avoided the worst-case tariff scenario, with expectations of improved operating income [15][16]