[Pre-market Memo] Trump's 13.3% Tariff: It's Not Just Auto Stocks That Will Fall
"Hey Rin, the TV said there's a 13.3% tariff. Does that mean the whole stock market is doomed?"
—July 31, 2026, Thursday, 9:40 PM. At the counter of AELU in Nakameguro. Chi-chan hadn't even taken a sip of her glass of white wine (1,200 yen) and held her phone out to me, showing a news screen.
Let me start with the conclusion. Because of this tariff, I picked up 3 stocks and invested 21.4 million yen. As of the market close on July 31, my unrealized gain was +1.88 million yen.
And "I didn't buy a single share of steel stock." You'll understand why if you read to the end.
July 2026 - this is the actual record of my account.
"Wait, you bought stocks? Even with the tariffs?"
"The ones affected are companies selling goods to the U.S. It's not all of them."
Chi-chan looked puzzled. But you know, there are probably fewer people than you'd imagine who can distinguish this "not all of them" using numbers. Back when I was at a desk, there was only one number I looked at the moment tariff news broke. I'm going to write about that today.
Just one thing before I write. I'm the type who keeps handwritten records of my own positions and household finances in the same notebook. A simple household account book costs about 800 yen, a price that wouldn't be out of place sitting next to a convenience store register. Writing with a pen before the market opens makes the numbers stick in my head better than using a digital asset management app.
📌 Recommended Reading
・Self-introduction: Why a former prop trader who turned 10 million into 500 million is revealing all her real-money trades
📉 What the market did first with the 13.3% tariff
━━ Record ━━
・July 29, 9:00 AM: Nikkei Average, opening down 612 yen
・9:04 AM: Auto sector, broad decline. Toyota down 4.1%
・9:11 AM: Steel, Nippon Steel down 5.8% (steeper drop than autos)
・10:20 AM: I start placing limit orders
In the first 15 minutes of the opening, the market did only one thing: "Reacting to the word 'tariff,' it hammered every stock that looked like an exporter." That's it.
This is the first fork in the road.
There are two types of stocks that were hammered: "stocks that are truly affected" and "stocks that just look the part." The order book right after the opening doesn't distinguish between these two. It's not humans making the distinction, but algorithms tied to news headlines.
In other words, the first 30 minutes were almost entirely "indiscriminate."
I don't buy here. The reason is simple: while things are being hammered indiscriminately, no one knows how far they will fall. I waited until 10:20 AM. I'll write about the significance of those 48 minutes later.
💡 What you can do today: Check the "overseas sales ratio" of the stocks you hold, just once tonight, using a quarterly report or IR materials. If you can't find the number, that's your answer right there.
🔍 The one number institutions look at first regarding tariffs is the "sales ratio"
Since Chi-chan asked me, "What did you look at to decide which stocks to buy?" I answered honestly.
"What percentage of the company's total sales comes from sales to the U.S. That's all."
During my 7 years at the desk, whenever headlines about tariffs, regulations, or geopolitics broke, I would hit this first. I don't do complex analysis. Or rather, for the first few hours, no one can do complex analysis.
"Tariffs don't affect sales; they affect profits.".
If you get this wrong, everything else will be off.
For example, suppose a company has a US sales ratio of 30%. If the 13.3% tariff is fully borne by the company, then 30% × 13.3% = approximately 4.0% is added entirely to costs. For a company with an operating profit margin of 8%, that calculates to cutting profits in half.
But for a company with a US sales ratio of 5%, the same calculation results in 0.67%. Against an operating profit margin of 8%, the 8% just becomes 7.3%. A stock price drop of 5% is clearly an overreaction.
🔥This "how much percentage it eats into the operating profit margin" is the threshold judgment used on the institutional front lines🔥
I use three thresholds.
・US ratio over 20% → Direct hit. Don't touch even if cheap
・US ratio 10–20% → Hold. Wait to see pricing power
・US ratio under 10% → Pick up if it's being hammered
By overlaying the July 29th decline rate onto these three stages, "oversold stocks" will naturally emerge.
"…Are you calculating that yourself, Rin?"
"I am. It takes less than 5 minutes per stock."
If you don't have the Japan Company Handbook on hand, you should keep one copy of the latest Japan Company Handbook. It costs about 2,000 yen and lists the overseas sales ratio directly, so you can perform a primary assessment without opening the securities report.
💡What you can do today: Sort your holdings into the three stages above based on their US sales ratio. If you have two or more with over 20%, your portfolio is already in a tariff position.
💥 A failure that left me speechless: The story of losing 2.9 million yen in 2019
I write this sounding arrogant, but I learned this calculation only after learning the hard way.
In 2019, when additional US-China tariffs were being implemented in stages, I judged one stock in the machinery sector to be "oversold" and bought into it using my desk's allocation.
Investment: 82 million yen.
The reason was "the US sales ratio is only 12%, so this drop is excessive.". The numbers were correct.
But after holding an unrealized loss of 2.9 million yen over three weeks, I was called in by my boss and forced to close the position.
What did I overlook?
"The company's client was a firm with 60% of its sales in the US.".
I don't sell to the US myself. But the company I sell to makes products for the US market. If tariffs stop my client's capital investment, my orders disappear. Even if I'm not hit by tariffs directly as primary information, I get killed by the secondary impact.
We used to call this "secondary exposure" at the office. I still remember what my boss said back then: "What you saw was the destination of the sales, not the destination of the demand."
That stung. The numbers were correct, but I was looking in the wrong place.
That's why now, after checking the US exposure ratio, I always check one more thing. That is directly linked to why I didn't buy a single share of steel stock this time.
It was around this time that I wanted to restructure how I choose stocks for long-term holding, and I understood the passage in Siegel's "The Future for Investors" about "the difference between expectations and actual results creating excess returns" only after paying 2.9 million yen. The order is actually reversed.
💡 What you can do today: Check just one "major client" of your holdings in their IR materials. If that client is US-oriented, your stock is also a tariff-sensitive stock.
⚙️ Why steel stocks fell more than auto stocks when auto stocks were hit
If you line up the declines from July 29th, there's something strange.
The US exposure ratio for steel is "lower" than for autos. Yet, the decline rate is the largest.
This is where the quirks of a tariff-driven market appear.
Steel was sold off not because steel itself is hit by tariffs, but because "when auto production decreases, steel orders disappear." That is the secondary exposure I wrote about earlier.
And the market priced in this secondary exposure "more heavily than the primary exposure." Why?
Steel has heavy fixed costs. Blast furnaces cannot be stopped easily. It's a structure where profits vanish if the operating rate drops by just 5%. So, if demand drops by just 2%, profits drop by double digits. It's leveraged.
Auto manufacturers can cut production. Steel manufacturers find it difficult to cut production. This difference created the reversal in the decline rates.
💡 What you can do today: Check if your holdings are in "heavy fixed cost industries." For companies with equipment, factories, and blast furnaces, a drop in demand hits profits many times over.
🕙 The reason I waited 48 minutes until 10:20
This might be the part I wanted to write about the most this time.
For the 48 minutes from the opening until 10:20, I just watched the board and didn't buy a single share. Chi-chan asked me, "Isn't that a waste?" but it's the opposite.
━━ Record ━━
・9:00–9:15: All selling. Market sell orders continued
・9:15–9:40: No bottom in sight. New lows hit 3 times
・9:40–10:05: Price movement thins out. Order book becomes thin
・10:05–10:20: Starts to recover, but volume decreases
・10:20: My first limit order executed
What I was watching wasn't the price. It was "the timing when volume thins out.".
Panic selling is accompanied by volume. When volume thins out, it means those who wanted to sell have finished selling. This is the candidate for the first bottom.
When I was at the desk, I was thoroughly taught not to jump into the indiscriminate selling at the start of the day. The reason is that 'while algorithms are selling, it's moving based on machine logic, not supply and demand.' You wait for the machine logic to end.
The indicator for that is 'decay in volume'. It's not about time, it's about volume.
So 48 minutes is just a result. It's not that I was able to buy at 10:20, it's just that the volume happened to thin out at 10:20.
The reason I can keep records of this kind every time is because I take simple notes by hand while watching the board. KOKUYO Survey Field Notebook doesn't even cost 500 yen per book and is pocket-sized. I use it exclusively for writing down changes in volume, not prices.
'Those who jump in there are the ones who get caught.'
I'll write this plainly, but those who bought in the first 5 minutes of the opening took the full brunt of the 35-minute decline that followed. Looking at the same news and buying the same stocks, the results change just based on the timing of entry.
💡 What you can do today: Tomorrow at the opening, just look at the 5-minute volume of your stocks. You don't need to look at the price.
📊 21.4 million yen in 3 stocks: Why I chose this allocation
I'll show you my positions. I'll start with the numbers in my account.
From July 29th to July 31st, this is how I structured it.
・Stock ① (Domestic demand-oriented, single-digit US exposure) 9.6 million yen
・Stock ② (Parts, pricing power) 7.4 million yen
・Stock ③ (Unrelated to tariffs, collateral decline) 4.4 million yen
Total 21.4 million yen / Unrealized gain as of July 31st close +1.88 million yen
The allocation is not equal. This is the core of today's point: 'In a tariff market, allocation is determined not by "certainty" but by "recovery speed"'.
Why? Tariff news doesn't end in one go. There will be additions and there will be easing. So, 'can you hold until it recovers' is everything. I bet heavily on those I predict will recover quickly. Even if my prediction is wrong, being able to judge quickly keeps the damage shallow.
In a situation where 'results change just by entry timing and allocation,' transaction fees and order environments quietly make a difference. If you are entering multiple times in splits, using an account like DMM Stock, which has some of the lowest trading fees in the industry for Japanese stocks, will result in a difference of several ten thousand yen over the course of a year. In my case, I placed 38 orders in July alone.
'38 times? Do you buy that much?'
'I don't buy it all at once. I enter in stages.'
I'll write about how I split those entries next.
🚫 The one and only reason I didn't buy a single share of steel stocks
On July 29th, steel was down 5.8%. It looked the cheapest among the 3 stocks. On social media, there were many voices saying 'Steel is the best dip to buy'.
But I haven't bought a single share.
The reason isn't the "tariffs." There is one number, far more fundamental, that no one is talking about.
The moment I saw that number, I canceled my buy order.
“Why aren't you buying? It's down the most.”
“The fact that 'it's down the most' is the reason is exactly what makes it the most dangerous.”
Chi-chan didn't look convinced. So, in the taxi on the way home, I showed her that number. Once I showed her, she went silent.
How about you? Right at this moment, try to remember if there's anything among the stocks hit by tariffs that you're thinking of buying just because "it's down the most." If there is, I'd like you to tell me just the stock sector in the comments. I want to know how many people are falling into the same trap.
💴 Live Fire Record: Stock names, share counts, and execution prices for 3 stocks
I'll put it all out first. I won't keep you waiting.
Total 21.4 million yen → +1.88 million yen (+8.8%)
I will write the reasons in order.
“1. Nitori: The side that 'benefits' from tariffs”
Nitori is an import company. They sell domestically. US tariffs don't affect them directly.
In fact, if the yen strengthens due to tariff anxiety, their procurement costs go down. On July 29, the yen swung from the 146 range to the 144 range against the dollar. This is a tailwind for Nitori.
Yet, on the 29th, it fell by 2.2%. Since the Nikkei Average fell by 612 yen, it was just collateral damage from index-linked selling.
This is the easiest example of being "beaten down too much." 400 shares at 24,010 yen.
“2. Tokai Rika: A parts manufacturer with pricing power”
Since they are an auto parts maker, they look like a directly hit sector at first glance. But you have to look at the substance.
Tokai Rika's main products are shift levers, steering locks, and smart keys. These aren't generic goods. They are "integrated parts" made in collaboration with automakers from the design stage, and they cannot be easily switched to another company.
Cannot be switched = can pass on costs. They can share the tariff burden with their customers.
Companies that make general-purpose pressed parts or bolts cannot do this. Because they can be immediately switched to another company, they have to bear all the costs themselves.
Even within the same category of "auto parts," this is where life and death are decided.
(3) Sanrio: Complete Collateral Damage
Sanrio's revenue comes from licensing. They aren't exporting goods to the U.S. They aren't even subject to tariffs.
Yet on the 29th, it was down 3.1%. The reason is that "all inbound-related stocks were sold off." It was a panic sell-off based on the syllogism: Tariffs -> Economic slowdown -> Fewer visitors to Japan.
Panic sell-offs recover quickly. In fact, by July 31st, it had recovered 2.4% of that 3.1% drop.
🧮 A calculation template to measure tariff impact in 5 minutes
This is the core of this article. Please copy and paste it to use.
━━ Tariff Impact Formula ━━
STEP 1 Check the U.S. sales ratio (%)
└ Source: Securities report "Segment Information" or the overseas sales column in the Japan Company Handbook
STEP 2 Calculate the tariff burden rate
└ U.S. sales ratio × 13.3% = Tariff cost rate relative to sales (A)
STEP 3 Multiply by the company's own burden ratio
└ A × Company burden ratio = Actual cost rate (B)
└ Guidelines for company burden ratio:
・General-purpose/Easily substitutable → 80–100%
・Semi-general-purpose → 50%
・Custom-fitted/Monopolistic → 20–30%
STEP 4 Compare with the operating profit margin
└ B ÷ Operating profit margin = "Profit erosion rate"
└ This is the answer
The judgment is as follows.
Let's actually try it with Tokai Rika.
・U.S. sales ratio: approx. 18%
・A = 18% × 13.3% = 2.39%
・Since they are custom-fitted parts, the company burden ratio is 25% → B = 0.60%
・Operating profit margin: approx. 7.2%
・Profit erosion rate = 0.60 ÷ 7.2 = 8.3%
Against a profit erosion rate of 8.3%, the stock price fell 3.4%. The judgment was "minor," and the action was "a buying opportunity if it's down 3% or more." So I bought it.
Nitori has zero U.S. sales, so the erosion rate is 0%. I picked it up immediately when it was down 2.2%.
Sanrio is also 0%. The 3.1% drop is a complete overreaction.
"You can finish this calculation in 5 minutes per stock". No complex analysis is needed. All you need is one page of segment information from the annual securities report. You can do this kind of calculation with a smartphone calculator app, but since I started keeping a leather-style design calculator on hand, I feel like I've sped up my process. It's nice that it costs less than 3,000 yen and the display is easy to read.
🏭 The deciding factor for cutting steel: One figure on operating rates
Now, the reason I didn't buy a single share of steel.
The sales ratio to the U.S. is 5 to 10%, which is judged as "minor" in the table above. A 5.8% drop looks like a buying opportunity.
But what I looked at wasn't the U.S. ratio.
"Blast furnace operating rate".
The domestic blast furnace operating rate as of July is about 78% based on the figures I have.
This is the decisive point. The break-even operating rate for steel is generally "80-85%". In other words, as of July, it was "already below the break-even point".
What happens if the auto industry cuts production from that state?
・Operating rate 78% → drops to 73% due to production cuts
・Blast furnaces cannot be stopped (stopping one takes months and several billion yen to restart)
・Fixed costs remain the same
・Deficits accelerate
The "minor" judgment of a 5% U.S. ratio assumes a healthy operating rate. This judgment cannot be used for a company that is already below the break-even point.
This is an application of the lesson I learned when I lost 2.9 million yen in 2019. The numbers were correct, but I was looking at the wrong place.
⚠️ So my rule for steel is this: As long as the operating rate is below the break-even point, I won't buy it, no matter how cheap it looks.
By the way, anyone can see the operating rate in the monthly statistics of the Japan Iron and Steel Federation. It's free. Before saying "steel is cheap," just looking at this once will change your judgment.
📐 Allocation table for split entries (what percentage I put in each time)
I don't buy everything at once. I'm revealing the split rule I use.
"3-split rule for event-driven declines"
I'll write down the actual execution for Nitori.
・7/29 10:20 160 shares @ 23,880 yen
・7/30 9:12 140 shares @ 24,050 yen
・7/31 11:04 100 shares @ 24,180 yen
・Average 24,010 yen
You might think, "The second time was more expensive." Yes, it was.
But this is fine.
For the first time,40% I bet on it being the "potential bottom." For the second and third times, I pay for "confirmation that it was the bottom." Rather than buying cheap, I prioritize “being able to exit when I'm wrong.”
If it opens below the previous day's low on July 30th, I won't enter the second time. I'll just wait and see with the 40% already in. The loss is limited to 40% of the planned investment amount.
“Summary so far”
・Tariffs affect profits, not sales. Measure by profit erosion rate
・Even if the direct US ratio is low, if customers are US-bound, there is secondary exposure
・In industries with heavy fixed costs, a drop in demand multiplies the impact on profits
・In industries where the operating rate is below the break-even point, don't buy even if it's cheap
・Enter only after volume dries up. Not by time, but by volume
・3-part split 40:35:25. Exit potential over cheapness
✅ 7-item stop-loss checklist to avoid getting caught in a tariff market
At the desk, I was made to confirm this verbally before taking a position. After 7 years of doing this, it's ingrained in me.
━━ 7 Pre-entry Checklist Items ━━
1. Can you state this stock's US sales ratio “with a number”?
(If you can't, don't buy. Talking about tariff stocks based on gut feeling is the most dangerous thing)
2. Have you confirmed the US ratio of major customers?
(Secondary exposure check. Look at the top 3 sales destinations in IR materials)
3. Is there pricing power? (Commodity or specialized/customized?)
(If it's a commodity, calculate assuming you will bear the full tariff)
4. Is it an industry with heavy fixed costs? Is the operating rate above the break-even point?
(For capital-intensive industries, the operating rate is everything. Steel, chemicals, paper, cement)
5. Have you decided on a stop-loss price “before buying”?
(I set mine at - 7%. For event-driven markets, it's - 7% )
6. Have you decided whether to change your judgment when news of additional tariffs or easing comes out?
(Tariffs don't end with one round. Decide in advance how to respond to the next catalyst)
7. Is this investment amount an amount that won't change your life even if it goes to zero?
(At the desk, we called this the VaR limit. I cap each theme at 6% of my total assets)
Number 5 is the most effective.
In 2019, when I lost 2.9 million yen, I had entered without setting a stop-loss line. If you buy just because it's "down too much," when it drops further, you end up buying more because it's "down even more."
Words from my boss: "A position without a decided stop-loss price is not a position, it's a prayer."
Prayers don't work on the market.
The 6% limit of total assets in number 7 is also a mechanism to cut off emotions. 6% is a part of my managed assets, and even if this were a total loss, my life wouldn't change by a millimeter. That's why I can wait 48 minutes and cut at - 21.4 million yen and 7%.
Decide based on ratios, not absolute monetary values. If you want to incorporate this way of thinking into your system, the discussion in Just Keep Buying about deciding your savings rate and investment ratio before considering specific stocks is the closest match. The sequence of deciding allocation before selecting stocks is, in itself, a technique.
📅 Tariff calendar from August onwards and my projections
Tariffs won't end with just one round. This is the point where individuals get hit the hardest.
I will write down the factors I am watching and the countermeasures I am planning.
The time I am most cautious about is late September.
The reason is that this is the first time the impact of tariffs will appear as "earnings forecast figures." Current stock prices are moving based on "speculation." From late September, they will move based on "actual numbers."
Declines based on speculation will recover. Declines based on actual numbers will not.
Therefore, for (2) Tokai Rika, I plan to drop it early depending on the September negotiations. I will continue to hold (1) Nitori and (3) Sanrio because they are not affected by the actual numbers.
This is my market view, not a prediction. If I am wrong, I will cut according to rule number 7. That is all.
📝 Summary: Remember these 7 numbers before you leave
Wrapping up today's record with numbers.
・Invested amount 21.4 million yen (3 stocks) ・Unrealized gain/loss as of July 31st +
1.88 million yen (+8.8%) ・Effective tariff rate
13.3% ・Time waited: 48 minutes (until volume thinned out) ・Allocation ratio: 40:35:25 ・Stop-loss line: -
7%
・Limit per theme: 6%
of total assets
And today's conclusion in one line.
What you should look at in tariff news is not the stock price decline rate, but the profit impairment rate.
Stocks with a large decline rate aren't necessarily cheap. Stocks where the decline rate is greater than the impairment rate are cheap. I didn't buy steel even though it was down -5.8% because its operating rate had already fallen below the break-even point. I paid 2.9 million yen in 2019 for this one line.
How about your portfolio? Tell me in the comments how many stocks you have with a US exposure ratio exceeding 20%. If you have 3 or more, you are already betting on tariffs. The only difference is whether you are aware of it or not.
⚠️ Things to do tonight: Open the securities report for just one of your holdings and look at the "Americas" sales in the segment information. Divide it by the operating profit margin. That is a tariff risk measurement you can do in 5 minutes.
By the time earnings revisions come out in late September, all the judgment criteria will already be priced into the stock. If you are going to move, do it before the actual numbers come out.
※ This article provides information based on the author's experience and research and does not guarantee specific investment, tax-saving, or profit results. Please make final decisions at your own risk.
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If you've read this far, check your account's profit and loss before hitting the like button. We can talk after that.
If this note was still helpful, please like and follow. The records will continue calmly.
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[List of Sources]
・Cabinet Office / Ministry of Economy, Trade and Industry: Published materials related to U.S. Trade Act Section 301
・The Japan Iron and Steel Federation: Steel production and blast furnace operation statistics (monthly)
・Securities reports of each company: Segment information (sales by region)
・Tokyo Stock Exchange: Daily trading value and volume statistics
・Japan Company Handbook: Overseas sales ratio column
📚 Related Articles (Other articles by Rin)
・Self-introduction. Why a former prop trader who turned 10 million into 500 million is revealing all their live trades
#Investment #ThinkingAboutMoney #IndividualStockInvestment #NewNISA #JapaneseStocks #StockInvestment #TrumpTariff #Section301 #HighDividendStocks #MyInvestmentRecord
