Nissan Needs A Tariff Deal

Good morning! It’s Friday, May 16, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at Nissan’s hopes for a U.S.-Japan trade deal, as well as the effects tariffs have had on American auto manufacturing. We’ll also take a look at tariffs’ effect on the USMCA trade deal, and BYD’s plans to expand to Europe. 

Nissan, like most automakers, doesn’t produce all of its cars in United States factories. Unlike other automakers, though, Nissan has been spiraling recently — even cutting massive swaths of its workforce just to stay in the game. The company can’t afford new American tariffs, so it’s begging Japanese officials to get a trade deal together sooner rather than later. From Reuters:

Nissan CEO Ivan Espinosa expects Japanese trade negotiators to move more quickly in negotiations with the United States towards securing lower tariffs, he said on Thursday, as the struggling automaker awaits clarity on the Trump administration’s duties on cars and auto parts.

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“I would expect that they move faster, to be very honest. We do need to get clarity as soon as possible,” Espinosa said, addressing the FT Future of the Car Summit in London via video link.

He was responding to a question on whether Japanese trade negotiators had moved fast enough to secure lower tariffs in their bilateral trade talks with the U.S.

Nissan has said its exports from Mexico and Japan accounted for just under 45% of its total U.S. sales, putting the cost of U.S. tariffs at an estimated 450 billion yen ($3.08 billion) in the current business year, before mitigation measures are factored in.

Nissan isn’t exactly going to offshore 100% of its global production to the States, so the company will need some sort of deal to stay competitive in our market. Either that, or we lose out on whatever the next GT-R is — and that’s a risk I don’t want to take. 

The whole point of those tariffs, though, is to bring more auto production stateside. So, how’re they doing at that goal? Not well, according to new data. In fact, car production in the States is down. From Automotive News:

It’s early, but we have the first data showing the possible impacts of President Donald Trump’s tariffs on North American light-vehicle production.

John Irwin reports today that the region will produce about 126,000 fewer vehicles this quarter because of tariffs than it otherwise would have, according to an estimate by AutoForecast Solutions. The estimate accounts for production changes announced by automakers through May 1, including both cuts and planned volume increases, the story says.

The number is small, accounting for less than 1 percent of the 16 million vehicles the region produced in 2024, Irwin writes, but it illustrates the effects tariffs are already having on the industry as automakers respond to rapidly changing trade rules.

Missing out on 1% of auto production isn’t a big deal, but it’s also not a fantastic sign. When the trade war stabilizes, will we be doing any better than we were before? Or will all our new import costs bring us no real gain?

In Donald Trump’s first term in office, the President tore up the North American Free Trade Agreement and replaced it with the United States-Mexico-Canada Agreement. The USMCA wasn’t a drastic departure from NAFTA, but apparently it’s too similar for second-term Trump’s liking. His recent trade moves could end up shredding that latter agreement, too. From the Detroit Free Press: 

Five years after its enactment, the president says the U.S.-Mexico-Canada free trade agreement, or USMCA, needs to be renegotiated — or possibly terminated.

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But playing by the rules hasn’t much helped American automakers this year. Trump’s tariff threats roiled profits and upended manufacturing plans in the months leading up to their implementation, the cost of which led to job layoffs and rapid restructuring.

Many industry experts ask, how can the Trump administration threaten automakers and suppliers who have been adhering to the very trade policy he negotiated, without first removing that trade policy?

The core problem with the USMCA, really, is that “tariff” is just such a beautiful word. No one on the Trump team had thought of it back in his first term, but now they know how beautiful the word is. 

BYD is ever expanding its reach, beyond the bounds of China, and it’s now working towards a very important step in scaling as an automaker: Adapting your models to individual markets. Cue a headquarters in Europe, where the company can have boots on the ground to sort out exactly what European buyers want, and adapt cars to meet those needs. From Reuters:

Chinese electric vehicle giant BYD expects to establish a European centre in Hungary, CEO and President Wang Chuanfu said on Thursday at a news conference with Hungarian Prime Minister Viktor Orban in Budapest.

Wang said that the new European centre will create 2,000 jobs and have three functions. It will be a hub for sales and after-sales services, for testing and for developing localised versions of the company’s models.

The biggest automakers have regional headquarters to localize their products, and now BYD will be no different. How long until there’s an American branch? 

There used to be a hole in the ozone, one that I certainly learned about as a kid. Did you ever wonder what happened to that? Well, we banded together globally and fixed it. Remember when we could do that?

It’s Bug Season in my apartment, and this has been on a loop in my head for days.