Japan has raised concerns over its economic ties with the United States after President Donald Trump announced a 25% tariff on imported cars.
The move has sparked fears of strained relations between the two nations and potential disruptions to global trade.
The new tariffs, set to take effect on April 3, apply to all vehicles not made in the United States. Japan, a major investor in the US economy, has expressed disappointment over the decision. Prime Minister Shigeru Ishiba, who recently met with Trump at the White House, stated that Japan is considering how best to respond to the policy.
Government officials in Tokyo have criticized the measure, arguing that it could harm both economies. Spokesman Yoshimasa Hayashi called the move “extremely regrettable” and urged Washington to reconsider. Japan has long lobbied for exemptions on tariffs, particularly for steel and automobiles, but these requests have been denied.
The impact of the announcement was immediately felt in financial markets. Major Japanese automakers saw their stock prices fall, with Toyota, Nissan, and Honda experiencing declines. In South Korea, Hyundai also saw a drop in its shares. While some losses were later recovered, uncertainty remains over how companies will absorb the extra costs.
Experts warn that Japan’s economy could shrink by 0.2% due to the tariffs. Economist Takahide Kiuchi noted that the policy could reduce production and employment in Japan, while Seiji Sugiura estimated that the additional costs for Japanese automakers could exceed $11 billion. Some industry insiders worry that the tariffs will drive companies to shift production overseas.
The Trump administration has defended the tariffs, arguing that they will boost American industry and create more domestic jobs. Critics, however, believe they will increase car prices for US consumers and disrupt international supply chains. Roughly half of all cars sold in the US are already made domestically, while Japanese and South Korean manufacturers contribute a significant portion of imported vehicles.
As tensions rise, both governments are under pressure to find a solution. While some Japanese citizens hope for a diplomatic compromise, businesses are bracing for the economic consequences of the new trade barrier.