[The cold tariff wave hit Hiroshima’s economy, and Mazda’s production cuts triggered a chain of shocks in the Japanese automobile industry]The United States imposed a 25% tariff on Japanese automobiles (effective from 2024). Mazda, as one of the most dependent Japanese automakers on the United States, is the first to bear the brunt. In May 2025, its sales in the United States plummeted 18.6% year-on-year, and continued to fall 6.5% in June 18. Tariffs have caused some models (such as the CX-5) to rise by about $3,000 in the United States, directly weakening market competitiveness. Hiroshima car interior supplier Yuji Yamaguchi (90% of its revenue relies on Mazda) is facing a sharp drop in orders, and the livelihoods of thousands of employees are at risk. More than 2,000 local parts companies are in the same dilemma. Koji Sasaki, owner of Fuakamachi bar, confirmed that after Mazda employees cut overtime and travel, night consumption plummeted by 30%. “Without overtime, there is no alcohol money.” Mazda has launched the largest layoffs since 2008, plans to cut 2% of Japan’s employees (about 500 people) and close some fuel vehicle production lines of Hiroshima Prefecture 17. A joint venture factory in Alabama, the United States suspended the production and sales of CX-50 models to Canada to avoid the 25% tariffs on both sides of the United States and Canada; data from the Japan Automobile Industry Association (JAMA) shows that there are more than 68,000 supply chain-related companies in the industry, employing 5.6 million people (accounting for 8% of the national labor force). Teikoku Data Bank warned: “Supply chain breakdown will trigger a systemic collapse” Prime Minister Shigeru Ishiba failed to fight for tariff buffers from the United States, and voter disappointment spread. Hideki Tsuchikawa, an economic official at Hiroshima, said bluntly: “Government support is crucial, but there is no hope at present; Mazda set up a tariff strategy team for weekly emergency consultations, but it is subject to labor shortages in the United States and cannot increase production capacity. Insiders revealed: “The short-term impact is inevitable, and the only thing that can be done is to protect employees and suppliers”_Foreign Exchange News_Huitong Finance www.fx678.com

Breaking News: US Tariffs Trigger Mazda Production Cuts, Threaten Japanese Auto Industry & Hiroshima Economy

Hiroshima, Japan – A chilling economic wave is sweeping through Hiroshima as US tariffs on Japanese automobiles begin to bite, with Mazda Motor Corporation feeling the initial and most severe impact. The 25% tariff, implemented in 2024, is already causing significant disruption, forcing Mazda to slash production, lay off workers, and prompting fears of a systemic collapse within Japan’s vast automotive supply chain. This is a developing story, and archyde.com is providing up-to-the-minute coverage.

Mazda Sales Plummet, Layoffs Begin

Mazda, heavily reliant on the US market, reported a staggering 18.6% year-on-year sales decline in the United States in May 2025, followed by a further 6.5% drop in June. The tariffs have directly increased the price of popular models like the CX-5 by approximately $3,000, eroding their competitiveness. This isn’t just about car sales; it’s about livelihoods. Mazda has announced the largest layoff round since 2008, impacting around 500 employees in Japan – a 2% reduction in its domestic workforce. Production lines in Hiroshima Prefecture are also slated for closure.

Ripple Effect: Suppliers and Local Businesses Face Ruin

The pain extends far beyond Mazda’s headquarters. Yuji Yamaguchi, a Hiroshima-based car interior supplier, reveals that 90% of his company’s revenue depends on Mazda. He’s bracing for a dramatic fall in orders, putting thousands of jobs at risk. More than 2,000 local parts companies are facing a similar predicament. The economic strain is even visible in the city’s nightlife. Koji Sasaki, owner of the Fuakamachi bar, reports a 30% plunge in evening revenue, attributing it to Mazda employees facing reduced overtime and, consequently, less disposable income. “Without overtime, there is no alcohol money,” he laments, a stark illustration of the real-world consequences.

Supply Chain at Risk: A Systemic Collapse Looms

The Japan Automobile Industry Association (JAMA) warns of a potentially catastrophic domino effect. With over 68,000 companies and 5.6 million workers (8% of Japan’s total workforce) tied to the automotive supply chain, a breakdown could trigger a “systemic collapse.” Mazda’s attempt to mitigate the damage by suspending CX-50 production at its Alabama joint venture, shifting output to Canada to avoid tariffs, is a temporary fix, not a solution. The situation highlights the intricate interconnectedness of global automotive manufacturing and the vulnerability of supply chains to geopolitical factors.

Political Fallout and Limited Options

The crisis has also sparked political repercussions. Prime Minister Shigeru Ishiba’s failure to secure tariff concessions from the US has fueled voter disappointment. Hiroshima economic official Hideki Tsuchikawa acknowledges the urgent need for government support but expresses pessimism about its immediate availability. Mazda has formed a dedicated “tariff strategy team” meeting weekly, but is hampered by a critical shortage of skilled labor in the United States, preventing any rapid expansion of production capacity there. Insiders concede that the short-term impact is unavoidable, with the focus now on protecting employees and suppliers.

The Broader Context: Trade Wars and Automotive Tariffs

This situation isn’t occurring in a vacuum. It’s a direct consequence of escalating trade tensions between the US and Japan, mirroring similar disputes seen in other industries. Automotive tariffs have long been a contentious issue, often used as leverage in broader trade negotiations. The US has historically sought to reduce its trade deficit with Japan, and tariffs are often presented as a tool to achieve this goal. However, economists widely agree that tariffs often backfire, harming both exporting and importing nations. Understanding the history of trade wars – from Smoot-Hawley in the 1930s to more recent disputes – provides crucial context for this unfolding crisis. For investors, this situation underscores the importance of diversifying portfolios and carefully assessing geopolitical risks.

The unfolding crisis at Mazda serves as a stark warning about the fragility of global supply chains and the far-reaching consequences of protectionist trade policies. As the situation evolves, archyde.com will continue to provide comprehensive coverage, offering insights and analysis to help you stay informed.