The U.S. auto industry is no longer defined by competition between domestic and foreign firms—instead it is deeply integrated. In fact, Japanese-brand automakers, have become a significant and embedded part of the U.S. economy, contributing meaningfully to employment, investment, and industrial activity.
Americans should recognize that Japanese-brand automakers have also become key contributors to the United States’ overall economy. Over the last 40 years, they have invested more than $70 billion in U.S. manufacturing and now operate 26 manufacturing plants, 41 research and development centers, and 65 distribution facilities across 27 states. Nearly one-third of all vehicles produced in the United States roll off Japanese-brand automakers’ assembly lines, about half of the vehicles they sell in the U.S. are built domestically, and nearly 75 percent of the vehicles they sell in the U.S. are built in North America.
According to a new report, which I authored on behalf of the Japan Automobile Manufacturers Association (JAMA), Japanese-brand automakers support a record-high of over 2.3 million American jobs. This includes over 108,000 manufacturing and operations jobs and more than 370,000 dealership jobs—approximately 480,000 direct jobs in total. This is nearly six times the size of industries like textiles and newspaper publishing, exceeds total U.S. passenger airline employment, and is larger than the combined workforces of Wyoming and Vermont. In total, the over 2.3 million jobs supported by Japanese-brand automakers and their dealer networks approaches the number of civilian employees in the U.S. federal government.
Those 480,000 manufacturing, supporting operations, and dealer network direct jobs support an additional 946,000 positions across the supplier network— producers of everything from steel to plastics, rubber, and the electronic components that go into every vehicle. Even still, there are another 919,000 spin-off jobs in restaurants, retail, and other local services sustained by all this economic activity. Together, these approximately 2.3 million workers earn $221 billion in total compensation, generating roughly $161 billion in disposable income that flows back into local economies across the country.
However, perhaps the most telling statistic is the growth trend. Since 2012, direct manufacturing employment by Japanese-brand automakers has risen nearly 34 percent—compared to just 5.4 percent for U.S. manufacturing overall. Japanese automakers are rapidly expanding, outpacing the growth of the broader manufacturing sector.
These figures are incredible and with the world's largest economy and deep capital markets, the United States remains the most reliable destination for long-term investment. But sustaining that positive investment climate today requires confronting several challenges, including trade uncertainty, rapid technological change, and workforce shortages.
Tariffs on imported vehicles and parts, their scope, duration, as well as questions surrounding the future of the United States-Mexico-Canada Agreement (USMCA), create real costs for an industry whose supply chains cross borders hundreds of times before a finished vehicle reaches a dealer lot. When trade policy shifts faster than product cycles, companies are forced to make billion-dollar investment decisions amid uncertainty that no business model handles well.
At the same time, the automotive industry is being remade from the ground up. Artificial intelligence is reshaping vehicle design and manufacturing. Similarly, the transition from internal combustion engines to hybrids, plug-in hybrids, and fully electric vehicles is forcing automakers to make enormous bets on technologies whose market trajectories remain uncertain. The removal of federal electric vehicle incentives in 2025 and the continuing gaps in charging infrastructure have slowed EV adoption in ways few predicted, leaving companies that had committed heavily to all-electric platforms scrambling to recalibrate.
Equally pressing is the workforce question. As vehicle technology becomes more complex, there is a growing demand for high-level software engineers, battery chemists, and automation specialists across every sector of the economy, not just the automotive industry. With this talent pool already limited, the result could lead to a genuine shortage of the skills automakers need most. The good news is that Japanese-brand automakers are not waiting to solve this problem. Through employer-led workforce development programs, including work-based learning, partnerships with community colleges and universities, and on-the-job training at several of their U.S. facilities, they offer models that are already closing that gap.
For policymakers, the message is clear. These companies have spent over four decades demonstrating their commitment to and leadership within American manufacturing. Maintaining investment momentum requires a stable trade environment, support for new technologies, and prioritizing workforce development. Over 2 million Americans whose livelihoods are connected to Japanese-brand automakers have a stake in getting that right.
Thomas Prusa is Professor of Economics at Rutgers University, New Brunswick, New Jersey. He has provided expert testimony before the U.S. International Trade Commission on many occasions. He has published numerous articles in leading journals and books on trade remedy laws and their impact. He has lectured in conferences and seminars around the world. His research has been featured in The Wall Street Journal, The New York Times, The Economist, and Investor’s Business Daily. He received his PhD from Stanford University (1988).
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