US Automakers Fume at Trump’s Japan Trade Deal

Reuters
By Michael Rainey

Good evening. The annual summer "jailbreak" took place this afternoon as the House finished its final floor votes and many members headed for the exits, not to return until September. Some work at the committee level continues, including efforts to advance funding bills for fiscal year 2026, but the House is closing up shop a day earlier than expected, in an effort to avoid further legislative entanglements with the Epstein case, which continues to bedevil President Donald Trump and House Speaker Mike Johnson.

Still, the looming recess didn't stop the House Oversight Subcommittee on Federal Law Enforcement from voting late in the day to subpoena the Department of Justice for the release of documents related to the Epstein case. The subcommittee is led by Republicans, but several GOP lawmakers, including Reps. Nancy Mace and Scott Perry, joined with Democrats to approve a motion from Democratic Rep. Summer Lee in an 8-2 vote.

"Numerous members of this committee and this subcommittee have called for answers and transparency," Lee said. "So let's do something about it." According to the committee's rules, a subpoena must be issued, a spokesperson for House Oversight Chair James Comer said.

Here's what's happening on the fiscal front.

Trump Announces 15% Tariff on Imports From Japan

President Donald Trump announced late Tuesday that the U.S. and Japan have agreed to a framework on trade that includes a 15% tariff on Japanese imports and $550 billion of investment by Japanese firms in the U.S.

"We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump said with his typical bravado, writing on his social media platform. "There has never been anything like it."

As is the case with other trade agreements Trump has announced, most of the details still need to be worked out. The overall framework includes the general tariff of 15% as well as the promised investment, which Trump said would operate "at my direction" and from which the U.S. would receive 90% of the profits - though no explanation of how that would work was provided. In addition, Trump said Japan has agreed to more completely open its markets to U.S.-made cars and trucks, as well as agricultural products, including rice.

Trump also claimed that Japan would pay the 15% tariff, once again mischaracterizing the nature of tariffs, which are taxes largely paid by U.S. importers and, ultimately, U.S consumers.

Just in time: Trump had threatened to impose a blanket 25% tariff on Japanese imports, in addition to the 50% tariffs on specific products such as steel, to take effect on August 1.

Treasury Secretary Scott Bessent told Bloomberg News that Japan won the lower tariff rate with an "innovative financing mechanism" for making new investments in the U.S. Commerce Secretary Howard Lutnick said the investment pledge could serve as a model for the European Union, which is hoping to reach an agreement for tariffs below the threatened 25% level.

Detroit not happy: U.S. automakers slammed the agreement, even as shares in Japanese automakers such as Honda and Toyota rose sharply in relief Wednesday. The U.S. firms said Japanese manufacturers will now pay a lower tariff on imports that have no U.S.-made components than U.S. firms will pay on vehicles produced in Canada and Mexico with a high percentage of U.S.-made components.

"Any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American-built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers," said Matt Blunt of the American Automotive Policy Council, which represents GM, Ford and Stellantis.

Analysts at Citibank saw some positive news in the announcement, but agreed that it is not good for U.S. producers. "The Japanese deal at least highlights that some mitigation on 25% ... U.S. auto tariffs is possible," Citi analysts said in a note, per The Wall Street Journal, adding that the 25% tariff U.S. automakers will have to pay on imports from Canada and Mexico puts them at a disadvantage.

Competitors from other nations also expressed disappointment, with Japanese autos now getting more favorable terms than autos imported from South Korea and Europe.

Number of the Day: $4.7 Million

In addition to serving as the head of the Office of Management and Budget, Russell Vought is also the temporary head of the Consumer Financial Protection Bureau, the independent agency responsible for consumer protection in the financial sector. According to documents obtained by the news site Government Executive, OMB is billing CRFB $4.7 million to cover the cost of Vought's security detail through the end of the year.

Vought has been extremely critical of CFPB and its mission, and has quietly dismissed enforcement actions the agency has brought against a variety of lenders, including Navy Federal and Toyota Motor Credit (see examples here and here). The Trump administration has attempted to slash the agency's budget and decimate its headcount, but it seems that Vought has found something useful for CFPB to do: pay for his security.

Rachel Cauley, a spokesperson for OMB and CFPB, told Government Executive that the media has created an environment that necessitates extensive security for Vought, one of the leaders of the Heritage Foundation's Project 2025, which provided a blueprint for the Trump administration's effort to radically reduce the federal government. "OMB and CFPB will do everything we can to ensure the safety of the director and his family," Cauley said.

Nearly Two-Thirds of Retirees Rely Substantially on Social Security

The proportion of retirees who say they rely "substantially" on Social Security has grown over the last 20 years, rising to 65% in 2025. By comparison, in 2005, a slim majority of 51% of retirees reported the same.

Those figures come from a new survey by AARP, which advocates for seniors. "As Social Security marks its 90th anniversary, it remains a cornerstone of financial security for millions of Americans," AARP said in an overview of the report.

Some other data derived from the survey:

  • 96% of survey respondents said Social Security is an important program;

  • 80% said they are worried about Social Security being there for them when they need it;

  • 78% said they are worried that Social Security won't provide enough to live on;

  • Confidence in the future of the program has declined from 43% to 36% since 2020, though confidence rises with age;

  • 62% did not know the age required to claim full retirement benefits.

The national survey involved 3,599 adults ages 18 and older and was conducted June 18-23, 2025.

Fiscal News Roundup

Views and Analysis