US trade policy has dealt a serious blow to Japan’s economy. The country’s leading car manufacturers have lost nearly $10 billion in profits due to American tariffs, becoming collateral damage in the escalating global trade standoff. This downturn marks their first significant profit drop in years and underscores the sweeping impact of Washington’s policies on Japan’s export-driven industries.

Seven giants of the automotive world — Toyota, Honda, Nissan, Mazda, Mitsubishi, Subaru, and Suzuki — have all suffered an unprecedented slide in profitability. From April to September 2025, their combined profit fell to 2.1 trillion yen (about $13 billion). Compared to the same period a year earlier, that represents a 30-percent decline, revealing how dependent Japan’s automakers are on unobstructed access to the US market.

The fallout extends well beyond the auto sector. Japan’s economy contracted by 1.2% in the third quarter of 2025, a drop directly tied to shrinking exports under the weight of US tariffs. Export volumes fell 4% in the second and third quarters. For the world’s fourth-largest economy, this is a significant blow — one that threatens to dent economic growth for a prolonged period.

Economists broadly agree: US tariffs have inflicted serious damage on Japan. The country’s long-standing reliance on exporting high-tech and high-value goods has collided with new trade barriers that restrict access to the world’s largest consumer market. Without meaningful tariff relief, Japan’s exports — and its broader economic outlook — are likely to remain under pressure in the coming quarters.