Local car dealership relieved by Japan US trade deal

HIAWATHA, Iowa (KCRG) – Local car dealerships that sell Japanese-made vehicles say the recently announced trade deal between the United States and Japan could boost business.

The US Japan trade deal sets the tariff rate with Japan at 15%.

Since April, the US has had a 25% tariff on auto imports, and that 10% decrease stands to make a big difference for dealerships importing Japanese cars.

When Dave Wright, owner of Dave Wright Nissan and Subaru in Hiawatha, first learned about the US Japan trade deal, it took away a lot of his concerns surrounding president Trump’s trade deadline.

“I think it’s the unknown, and then the fear of how high will they go if a country doesn’t want to participate, you know. Do we end up 30, 35, even worse?,” Wright said

Since April foreign auto imports have been subject to a 25% tariff, but Japanese imports will now be lowered to 15%.

Wright said Nissan and Subaru absorbed tariff costs so far, so his dealership didn’t see higher costs yet, but he said costs would’ve eventually increased.

“Oh yeah I think they would’ve had to. I think that was pretty hard to absorb long term, certainly year after year,” Wright said

Wright said when the Trump administration first announced tariffs, the dealership saw a surge in customers in early April. He said since tariffs went into effect, business slowed.

“We can feel the consumers were stepping back a little, little more hesitant. They were only coming out in times of need, not necessarily because they wanted to, and then I think the big number is how much were our cars gonna go up eventually,” Wright said.

With a 15% tariff rate, Wright said there’s a chance cars in the lot see higher costs, especially cars that are assembled abroad.

But the way he sees it, the trade deal is a good outcome.

“Now our manufacturers can sit down, evaluate what they produce here, what they’re gonna produce here, maybe change the mix, and certainly be able to tell us the real number,” Wright said.