The Japanese auto industry is grappling with a significant upheaval due to U.S. tariffs on vehicles and parts. These tariffs, imposed at 25%, are expected to cost major automakers like Toyota, Honda, Mazda, and Subaru over $19 billion this fiscal year. Small businesses within the automotive sector, closely linked to supply chains, are facing increased pressure in addition to navigating a global transition towards electric vehicles. Subaru anticipates a significant financial hit of 2.5 billion yen in the current fiscal year, with CEO Atsushi Osaki hinting at relocation to the U.S. as a potential solution to mitigate rising costs. Honda has already shifted production of the hybrid Civic to Alabama and halted its massive $11-billion EV supply chain plan in Canada. Other automakers are also adjusting their strategies, including Mazda, which has stopped Canadian exports of an Alabama-built model and Nissan, which has halted U.S. orders for Mexican-built SUVs. While Toyota is considering long-term expansion in the U.S., concrete steps remain to be taken. 2023 is proving to be a challenging year with many Japanese automakers facing uncertainty due to tariffs and market shifts.