The promise of populism is that the world is secretly simple, but the reality of governing is that the world is actually unbelievably complex. Today, I’m going to talk about that complexity. Specifically, I’m going to connect the prophecy of a comic book, the War in Ukraine, rural Japanese voters, and the price of wheat versus the price of rice, to the likelihood that your next Crosstrek could be way more expensive.
It’s going to be one of those Morning Dumps wherein I embrace the messiness of the world and try to make sense of it, James Burke-style. That’s going to be the fun way, I hope, to talk about trade, a subject that’s probably more interesting to us than to consumers who are just trying to figure out what to buy.
Will this be comfort for the European Union? Probably not! Europe is trying to get itself out of a trade war with the United States, and the fear of becoming the next Japan seems to be pushing it towards a deal. This is important for Porsche, which needs our market, as well as Stellantis, which has to appease both governments in Italy and in Washington.
Herodotus, the original historian, once observed that the worst grief a person can feel comes from having insight into much and power over nothing. Come along for a little ride with me through the world this morning, and you can decide if I have any of the former, because I’m certainly lacking in the latter.
Yes, You Might Be Able To Blame The Price Of A Crosstrek, BRZ, Or Even A WRX On The War In Ukraine And A Comic Book
@cnn Japan gets earthquakes every day – but viral predictions of a July 5 megaquake, from psychics to feng shui masters, have spooked some travelers into canceling their trips. Could it be true? CNN’s Hanako Montgomery reports. #cnn #news #manga #japan #earthquake #megaquake
This is going to get weird before it starts to make sense, but just bear with me here because it’s going to all make sense in the end.
I was enjoying the 4th of July with some friends who currently live in Tokyo but were back in the States for the summer. They were joking about how empty Tokyo was lately because of fears of a “Megaquake.” Was this a prediction from authorities prompting this fear? Not quite. In 1999, a Japanese artist named Ryo Tatsuki released a Manga called “The Future I Saw” about her many dreams and visions.
Some of these dreams seem to have come true, including the timing of the deaths of Freddy Mercury and Princess Diana (which she wrote about, according to her, prior to the book’s publication). What’s more important, though, is that she does seem to have accurately predicted the 2011 Tōhoku earthquake and tsunami a full 12 years before it happened. The book wasn’t super popular when it was released, but in the last few years gained cult status, leading to a reprint in 2021.
This seems to be driving people in the area crazy, causing a drop in tourism and a rise in Japanese families buying large amounts of rice, which has, inevitably, led to a rise in rice prices and a drop in availability. The timing of this concern over megaquakes was tied, unfortunately, to a hot summer in 2023 that screwed with the harvest, and other factors impacting both the supply and demand of rice.
Couldn’t they just, you know, eat more pasta and bread? Sure, but the War in Ukraine has screwed with wheat prices (both Russia and Ukraine produce a lot of wheat) and impacted that other Japanese staple: ramen. Last year, the cost of wheat led to a little bit of a ramen crisis.
Japan imports a lot of its wheat, but it grows most of its rice, and the growing of rice in Japan is a major political issue. The government plays a big role in protecting the industry, as Bloomberg explains:
A total of 7.34 million tons of the grain — not just table rice, but also animal feed and rice that requires further processing, for example, to make sake — was produced in Japan last year. This is compared with just 770,000 tons of tariff-free rice the government imports each year. Rice imported beyond that amount is tariffed at ¥341 per kilogram. Given the fluctuations in the price of rice, it’s hard to determine the exact tariff rate, but by some estimates it’s about 200%. Outside of Japan, the majority of rice is imported from the US and Thailand.
Today the rice industry wields significant political influence and maintains close ties with the ruling Liberal Democratic Party. In particular, some swing districts rely heavily on bloc votes from agricultural organizations, including Ishiba’s home base in the Tottori-Shimane district. This forces Ishiba to balance the interests of these rural stakeholders with those of urban voters who wish to see lower rice prices.
Timing is everything. An election is coming up in Japan, and Prime Minister Shigeru Ishiba is potentially in trouble, which means he needs to deliver on the rice issue as well as trade. About 1-in-10 workers in Japan are employed by car companies or in jobs that are related to the auto industry.
It’s not going well. From CNN last week:
US President Donald Trump cast doubt on reaching a trade deal with Japan, a day after threatening higher tariffs on Japanese exports to the United States, claiming the country won’t buy American rice.
“We’ve dealt with Japan. I’m not sure if we’re gonna make a deal, I doubt it, with Japan,” he told reporters on Air Force One on Tuesday. “They and others are so spoiled from having ripped us off for 30, 40 years that it’s really hard for them to make a deal.”
President Trump keeps talking about there being a rice crisis in Japan and Japan not buying American rice. This isn’t precisely true. Japan has been importing “historically high volumes of U.S. rice” recently, though the above politics means that the government there is still keeping it limited for now.
Here’s the state of current negotiations and politics according to Reuters:
Some Japanese officials believe Tokyo will have to change tack and consider lowering barriers on farm imports to appease Trump.
Others, including Tokyo’s top trade negotiator Akazawa, have said Washington must reduce tariffs on Japan’s vital automotive sector if a broader deal is to be reached.
But first Ishiba must face his public, some of whom are growing increasingly frustrated by the lack of progress.
“Given the tariffs number that we got, frankly it makes me wonder what all the past negotiations were for,” said Hidetoshi Inada, 64, speaking outside Tokyo’s Shimbashi station on his way home from his office job for a telecoms firm.
“The outcome is everything,” he said.
It’s not great. While Japanese automakers are doing the best they can to move as much production to the United States as quickly as they can, that’s not an overnight process. Honda and Toyota have more robust manufacturing for their most popular products here in the United States, while brands like Subaru and Mazda rely more on imports from Japan and Mexico. In particular, the base model Crosstreks, BRZ, and WRX are all products that are made in Japan and imported to the United States.
The production of the higher trim Crosstrek has been shifted to the United States, so transitioning production of lower trims here might be easier. The BRZ and WRX are either going to be made in Japan or not at all. This means that we can either see the WRX/BRZ go away or, more likely, some amount of price increases will have to be passed onto consumers if a deal isn’t made.
While this isn’t purely the cause of one Manga, this one strange (and so far incorrect) prophecy has had an unfortunate ripple effect (a rice crisis, which put the idea of rice trade into Trump’s crosshairs) through global trade that could impact your next car purchase.
The EU, At Least, Isn’t Worried About Comic Books
It’s been a while since I’ve been able to use this strange stock photo of two people draped in the flag of the European Union, so I’m grateful to be able to talk about how the EU still thinks it’ll get a deal after President Trump seemed open to pushing the tariff deadline a bit.
The European Union is seeking to conclude a preliminary trade deal with the U.S. this week that would allow it to lock in a 10 percent tariff rate beyond President Donald Trump’s new August deadline for an agreement.
The EU still aims to reach a trade deal by July 9 after Trump shifted his tariff deadline to Aug. 1, said a spokesperson for the European Commission, which handles EU trade matters.
Universal tariffs that were due to begin on July 9 will be delayed until at least the beginning of August, the U.S. said on July 7. For the EU, tariffs on nearly all its exports to the U.S. will jump to 50 percent after the August deadline if it does not strike a deal beforehand.
The EU is looking into an arrangement that would allow European automakers that produce and export cars from the U.S. to import more EU vehicles at tariff rates below the current 25 percent, Reuters reported.
European automakers already export cars from the United States to other markets, so this is neither the best nor the worst news. A 10% baseline tariff number, which is being floated, is something most automakers should be able to absorb. It might lead to a shift in production of some models to America from Europe, but that’s a small price to pay for keeping access to American consumers.
Porsche Sales Slow Down From Q1
One brand that definitely needs American consumers is Porsche, and Porsche is one of the brands that doesn’t make any cars here. PCNA had a great first quarter, so even a slight decline in sales this quarter means that the brand overall had its best first half ever in the U.S.
Here’s the sales breakdown, if you’re curious:
The future, as Bloomberg reports, is a little less certain:
“We expect the environment to remain challenging,” Matthias Becker, Porsche’s board member for sales and marketing, said July 8 in a statement. The company cited fierce competition in China as the main factor behind its 28 percent sales slump in the world’s biggest auto market.
European luxury automakers are losing momentum in the U.S. and continue to fall behind in China, where local brands are taking over.
Mercedes-Benz on July 7 said its sales dropped 10 percent in the second quarter after President Donald Trump’s tariffs curbed deliveries in the U.S. and China. Porsche is one of the automakers most exposed to the levies because it lacks a factory in the U.S.
A deal between the European Union and the United States can’t come fast enough for Porsche.
Stellantis Production Drops In Italy
The whole world is freaking out a bit about tariffs, and both Japan and South Korea are on the losing end of it. If the EU can make a deal, that could be good for brands like Porsche (you can imagine a scenario where VW exports a ton of cars in order to allow Audi and Porsche to import cars at the 10% tariff), BMW, Volvo, et cetera.
What about Stellantis? One of the ongoing issues that Carlos Tavares, not pictured above, had when running the company was that the populist right-wing government under Giorgia Meloni doesn’t want to see the company shift jobs out of the country. However, as part of a trade deal to appease the populist ring-wing government in the United States… that’s exactly what the company might have to do.
Bloomberg explains why this is a headache for the new guy, too:
The company, which makes Fiat, Alfa Romeo and Jeep-branded models in Italy, produced 34% fewer passenger cars in the first six months of 2025, according to a report published Monday by FIM-CISL union. Commercial-vehicle production fell 16%.
The slump is a setback for new Chief Executive Officer Antonio Filosa, who faces multiple challenges after taking over in late June. Sales in the US, the company’s most important market, fell 10% in the first half, while European registrations have also been declining. Stellantis pledged to increase Italian production to repair relations with the government after ousting its former CEO last year.
If Stellantis made a bunch of popular cars in Europe and the United States, this would be less of a crisis, but that takes time. In the interim, Stellantis has to avoid the Nissan problem of overproduction of cars no one wants.
What I’m Listening To While Writing TMD
I’ve been slowly working my way through this latest season of The Bear, which has gotten over its post-success onanism and is producing episodes that are more enjoyable to watch. A recent episode used St. Vincent’s “Slow Disco” and that’s been rattling around in my head ever since.
The Big Question
What’s your favorite example of the car world being impacted by something that has nothing at all, really, to do with cars?
Top graphic images: Ryo Tatsuki/Ebay seller; Subaru; depositphotos.com; stock.adobe.com
I have lived in Japan since the late 1980s, married a Japanese national, work with 100% Japanese colleagues, live in a small city west of Tokyo with only Japanese neighbours, watch Japanese TV news most nights, and can tell you for a fact that I don’t know a single person stockpiling rice because of an earthquake prediction in a manga.
The population of Japan is regularly warned that another Big One is inevitable, and in particular that the Nankai Trough could pop any time. Especially since 2011, most families have their own earthquake preparations and, for example, in our office we keep an excess drinking water supply, a stock of pouched and dried foods, helmets, space blankets etc.
For some reason, potential tourists from some areas in Asia apparently got hung up on that manga prediction, but it has barely registered here. The rice shortage is due to a combination of structural factors, including supply manipulation by wholesalers, and is contributing in a big way to overall inflation. If it was because of the manga, you would expect rice prices to be falling by now as everyone started eating into their stockpiled supply. Prices have barely changed.
Sorry I have zero confidence in an economic/business article from anyone on the Autopian staff. You guys are great writers are car experts but I have never been any semblance of economics knowledge here.
COVID. It taught people how overly dependent we are on world trade for everything, including cars. Call me old fashioned, but if I were making anything I’d want everyone in the same country, all speaking the same language, as to avoid as many issues as possible.