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Negotiation is expected to start in June and could affect tariffs in South America, create space for Brazilian oil exports, and expand the dispute for critical minerals.
Japan wants to open negotiations with Mercosur in June to create an economic partnership agreement that could reduce tariffs on Japanese cars and auto parts in South America. The move directly targets one of the bloc’s most sensitive markets and could alter the competitiveness of automakers currently selling in the region.
According to quatrorodas.abril.com.br, the negotiation also involves energy and strategic minerals, two topics that have gained importance in the Japanese strategy. On the radar are everything from Brazilian oil to rare earths and lithium, in an attempt to reduce external dependencies and strengthen the supply of the Asian country.
The announcement could advance during the G7 summit in France, in meetings between the Japanese Prime Minister, Sanae Takaichi, and the presidents of Brazil, Luiz Inácio Lula da Silva, and Argentina, Javier Milei. The automotive sector appears as an immediate priority, but the agenda is much broader than that.
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Tariffs of more than 13% put Japanese automakers at a disadvantage
Today, Japanese automakers face average tariffs above 13% in countries like Brazil and Argentina. It is a significant burden for brands competing in markets where the final price is crucial in the purchase decision.
At the same time, the Japanese government wants to avoid losing ground to European manufacturers after the provisional entry into force of the agreement between Mercosur and the European Union. This treaty gives tariff advantages to groups like Volkswagen, Stellantis, and Renault, and has set off alarms in Tokyo.
Toyota, Honda, and Nissan could gain space in the region
Among the companies that may benefit from a potential agreement are Toyota, Honda, and Nissan. In practice, tariff relief could improve these brands’ position in Mercosur, especially in a scenario of tougher competition with European groups.
Today, no car produced in Mercosur is exported to Japan. Conversely, vehicles from Japanese brands continue to be imported to South American countries, including models from Lexus and Subaru. If the negotiation progresses, the commercial relationship between the two sides may gain another scale.
Brazil becomes a central piece in the search for oil and critical minerals
Besides the automotive sector, Japan wants to reinforce its energy security. The country imports about 90% of the crude oil it consumes from the Middle East and has recently suffered impacts after disruptions in the Strait of Hormuz.
In this scenario, Brazil has come to be seen as a strategic alternative. During a visit to Tokyo, the Minister of Foreign Affairs, Mauro Vieira, stated that Petrobras is ready to expand exports to the Japanese market.
Another sensitive point is the supply of critical minerals used in batteries and electrified vehicles. Japan wants to reduce its dependence on China for access to rare earths, while Brazil has one of the largest reserves of these materials in the world. Meanwhile, Argentina appears as one of the main global producers of lithium.
Agricultural resistance is behind, and the urgency now is different
The agreement between Mercosur and Japan has been discussed for years but was hindered by the resistance of the Japanese agricultural sector, mainly due to the import of South American beef. The recent energy crisis, however, has shifted the priority of the Japanese government.
With pressure on energy, minerals, and industrial competitiveness, the negotiation gained new momentum. For the Japanese automotive industry, the move became urgent after the advancement of the pact between Mercosur and the European Union, which could leave Asian brands at a disadvantage within one of the most relevant markets outside the major traditional centers.
If the conversation progresses, the impact could go far beyond cheaper cars. The agreement could reshape trade routes, strengthen Brazilian exports, and place Mercosur at the center of a global dispute for energy and raw materials. If you follow the sector, it’s worth keeping an eye on the next steps of this negotiation.
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