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U.S. President Donald Trump signs an executive order on September 4 lowering tariffs on Japanese automobiles to 15%, raising concerns in South Korea about potential disadvantages in the U.S. market. / Source: EPA-Yonhap

President Donald Trump signed an executive order on September 4 lowering tariffs on Japanese automobiles from 27.5% to 15%, a move expected to reshape competition in the U.S. auto market. Analysts warn the change could put South Korea at a disadvantage, as its own tariff reduction deal has yet to be finalized.

According to Reuters and other outlets, the order implements the U.S.-Japan trade agreement announced on July 22, which covered autos, agricultural goods, and industrial products. Differences over the application of reciprocal tariffs had delayed the signing.

The order sets a clear framework: products with existing tariffs below 15% will not exceed that level even after reciprocal tariffs are added, while those already above 15% will not face further charges. The rule mirrors EU conditions and reflects Japan’s long-standing demand for a “15% cap,” effectively sidelining earlier U.S. proposals to impose an additional 15% on top of existing duties.

Trump also allowed exemptions for certain Japanese imports that are hard to replace domestically, such as natural resources and generic drug ingredients, giving the Commerce Secretary authority to reduce tariffs to 0% where necessary. The measure aims to ease burdens on U.S. consumers and industries.

Experts see the move as more than a tariff cut, describing it as part of Washington’s broader strategy to deepen economic ties with Tokyo while countering China.

For South Korea, the timing is critical. Seoul reached its own deal on July 30 to cut auto tariffs to 15% in exchange for $350 billion in U.S. investments and $100 billion in American energy purchases, but the U.S. executive order for Korea has yet to take effect.

This gap could allow Japanese automakers to gain a price edge in the U.S. market within weeks. Reuters reported that the tariff reduction on Japanese vehicles could be applied as early as 10 to 14 days after the order’s publication.