“Of course, the negotiations will not be easy going forward, but President Trump has stated that he wants to give top priority to the talks with Japan.”
So stated Japanese Prime Minister Shigeru Ishiba with regards to trade negotiations with President Donald Trump in the coming months.
Indeed, many Americans believed that a favorable trade deal was imminent with Japan, especially after a delegation’s recent arrival to the United States.
Much to many individuals’ surprise, however, a trade deal apparently has not emerged after all.
In addition, none other than Canada has played a role, even if unwittingly, in the sudden shift in Japanese strategy.
And that shift includes moving a significant degree of production of Subaru vehicles out of the United States and into Japan.
According to a report from the Daily Mail, this shift will be substantial, significantly reducing American exports to Canada.
“Subaru, which sold 68,043 cars in Canada in 2024, is reshuffling its supply chain in response to escalating car trade scuffles. The company sold over 17,700 American-built vehicles in Canada last year, making up 26 percent of its 2024 sales,” the Daily Mail detailed.
And that 26 percent is now set to plummet in 2026.
“But the Japanese automaker’s Canadian division will slash US imports to just 10 percent by the 2026 model year, representing thousands of cars and millions of dollars lost. The biggest impact will be on the American-built Outback. The popular car will no longer ship north after 2026,” the Daily Mail continued.
A TATC report also affirmed several of the points made in the Daily Mail article.
“Canada’s free-trade deal with Japan (and other countries) will permit the entry of Outback wagons from Asia without penalty, giving Subaru the ability to continue selling the things at a relatively sane sticker price instead of having to slap a 25 percent tax on the Monroney. Subaru is said to have a target of just 10 percent for American imports into Canada. This suggests a goodly number of Forester crossovers will come to Canada from Japan in the future, as well,” TATC detailed.
Will production be further slashed in 2027, 2028, and so forth, at this rate?
Time remains to tell, but it is clear that the trade talks somehow went sideways.
That said, Subaru CEO Atsushi Osaki made it clear that the company is note entirely abandoning the American market.
“We are dedicated to offering our American customers a wide range of options to meet their evolving needs,” Osaki declared.
On the other hand, some Japanese politicians are apparently enraged at the manner in which the United States has approached peace talks.
Japanese opposition lawmaker Shinji Oguma, for instance, effectively compared the United States to a thuggish gang.
“If Japan listens to this and bends the other way in response to the impossible demands of bargaining and deals, it will set a bad example as a customary and historical precedent. If you get mugged and put money in their hands, they will come back to mug us,” Oguma proclaimed, effectively urging no easy deals, if any deals at all, with the United States.
Looks like Oguma and the new Canadian prime minister would get along well.
As detailed in Reuters, Prime Minister Mark Carney made it rather clear that he would fight back hard against Trump.
“His strategy is to break us so America can own us … We are over the shock of the betrayal. But we should never forget the lessons,” Carney raged.
And it looks like the first round of economic carnage launched by Carney includes a significant shift to “Made in Japan.”
Author: Jane Jones
