Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Japanese commerce negotiators making an attempt to spare their nation from Donald Trump’s tariffs are getting ready to do battle over a difficulty the place neither facet can simply again down: a automotive security check that doesn’t exist.
Trump has perplexed officers in Tokyo with a reference to a Japanese “bowling-ball” check — dropping a bowling ball on to a automotive and failing any car if its bonnet dents underneath the influence.
The US president first referred to the check in 2018. “They take a bowling ball from 20 ft up within the air they usually drop it on the hood of the automotive. And if the hood dents, then the automotive doesn’t qualify,” he mentioned. “It’s horrible, the best way we’re handled.”
On Sunday he once more cited the check on his Reality Social platform for instance of “protecting technical requirements”.
Japan doesn’t perform such exams on its vehicles, though one carried out within the nation and elsewhere does entail hitting a automotive with a rounded object at a pace of 35kph, to simulate an influence with a pedestrian. Within the check, a dent within the bonnet usually signifies good shock absorption and a probably much less lethal influence.
It’s a part of a UN-formulated security regime that carefully resembles Europe’s and places new automotive fashions by way of exams on 43 objects. The US has its personal proprietary automotive security testing regime that diverges from UN requirements.
Japan has tons at stake within the commerce negotiations with the US, which Tokyo’s chief negotiator, Ryosei Akazawa, will resume in Washington subsequent week. Trump has threatened its export-oriented financial system with 24 per cent “reciprocal tariffs” on prime of levies on vehicles and metals, and has beforehand recommended that vehicles will likely be excessive on the agenda.
“94 per cent of the vehicles in Japan are made in Japan. Toyota sells a million overseas made vehicles into america and Common Motors sells nearly none,” mentioned Trump on the day that reciprocal tariffs have been introduced in early April.
US complaints about imbalances with Japan in automotive exports usually are not new. “There are a lot of Japanese vehicles in America. I wish to see extra American vehicles in Japan, as properly,” Barack Obama mentioned on a go to to Japan as president in 2015.
Some US manufacturers comparable to Jeep and Tesla have made inroads in Japan however 2024 fiscal 12 months gross sales of as much as 17,207 items for US manufacturers have been a fraction of the 4.57mn passenger vehicles offered in Japan, in line with official information.
Some US carmakers admit that has little to do with non-tariff limitations.
“There are little quirks however they’re remnants of a forms of a system that has been altering slowly. Are they non tariff limitations? Sure, they’re because it takes extra money and time to conform,” mentioned Pontus Häggström, who led Fiat Chrysler in Japan for greater than a decade and is now regional director of Alpine, Renault’s sports activities automotive model.
“Is that this the explanation why US vehicles usually are not promoting in Japan? The reply is totally not.”
One senior promoting govt in Tokyo, who labored on advertising and marketing US automotive manufacturers in Tokyo through the Nineteen Nineties and early 2000s, mentioned promoting American vehicles to Japan was a problem as a result of they’re “too large, devour an excessive amount of gasoline, and lack the little design particulars that the shopper right here seems for”.
Whereas Japan stays in quest of compromises that may enchantment to Trump, any compromise on security requirements won’t be accepted by prime minister Shigeru Ishiba, who’s making an attempt to shore up his recognition and has repeatedly referred to Trump’s tariffs as having precipitated a “nationwide disaster”.
“Be it vehicles or agricultural merchandise, we won’t do something that can have an effect on security,” he informed a parliamentary session this week.
However Japan may need floor to cede on different non-tariff limitations for imported autos, together with subsidies that favour native producers comparable to Toyota and Japan’s distinctive fast-charging requirements for electrical autos, in line with auto executives.
“If Japan desires to supply one thing, then they’ll do it on the EV entrance as there are some limitations there,” mentioned Ludwig Kanzler, chief govt of Hanegi Options, a consulting agency that has suggested South Korea’s Hyundai on market entry to Japan.
