Japan’s government has expressed deep concern over President Donald Trump’s announcement of 25 percent import tariffs on all foreign-made cars, warning that the move could severely impact US-Japan economic ties and disrupt the global trade system.
Trump’s new tariffs, set to take effect at 12:01 am (0401 GMT) on April 3, have sparked alarm across Asia’s automotive sector, with Japanese and South Korean officials mobilizing to assess the potential economic damage.
Japan’s Response: “Extremely Regrettable”
Prime Minister Shigeru Ishiba, who recently met with Trump at the White House, emphasized Japan’s substantial investments in the US economy and the millions of jobs tied to the auto sector.
“Japan has made significant investments and job creation in the United States,” Ishiba stated. “We are the number one investor in the US, and these broad trade restrictions could have a significant impact on the global economy.”
Government spokesman Yoshimasa Hayashi echoed Ishiba’s concerns, urging the US to exempt Japanese vehicles from the tariffs.
“We strongly urged the US government to exclude Japan from these measures. The tariffs are extremely regrettable and could disrupt the multilateral trading system,” Hayashi said.
South Korea’s Emergency Response
South Korea’s Trade and Industry Minister, Ahn Duk-geun, held an emergency meeting with automakers and other industry leaders following the announcement.
“The government will work closely with the industry to devise countermeasures and announce a comprehensive emergency response plan for the auto sector in April,” Ahn said.
Market Reaction: Auto Stocks Plunge
Trump’s tariff announcement triggered a sharp sell-off in Asian carmakers’ stocks:
- Toyota fell 2.0%
- Nissan dropped 1.7%
- Honda declined 2.5%
- Hyundai in South Korea dipped 4.0%
While Honda confirmed it was assessing the tariffs’ impact, Toyota did not immediately provide a comment.
“We will study the impact and take steps to minimize the damage,” a Honda spokesperson said.
Economic Consequences: Billions in Additional Costs
Japanese vehicles account for 28% of Japan’s $142 billion in US-bound exports. With 16% of cars imported into the US coming from Japan, experts warn the tariffs will hit the Japanese economy hard.
Takahide Kiuchi, an economist at Nomura, estimated that the tariffs could shrink Japan’s GDP by 0.2%.
“This will contract domestic production and hollow out the economy,” Kiuchi said.
Seiji Sugiura, a senior analyst at Tokai Tokyo Intelligence Laboratory, warned the tariffs could cost Japan’s six major automakers an estimated $11.4 billion in additional expenses.
“This is very high-impact, and automakers haven’t yet outlined how they’ll handle these tariffs,” Sugiura said.
US-Japan Trade Tensions Escalate
Despite Japanese ministers lobbying for tariff exemptions, the Trump administration remains firm, arguing that the tariffs will revitalize American industry and raise government revenue.
Critics argue the tariffs will increase consumer prices in the US, where approximately 50% of cars sold are produced domestically.
Hiroki Ito, an IT professional with ties to the auto industry, voiced concerns about the tariff’s ripple effects.
“A 25% tariff is pretty big—even if I’m not in the auto industry, I’ll feel the impact,” Ito said.
As tensions rise, many hope for a diplomatic resolution.
“I hope Japan and the US can find common ground to resolve these issues in a calm manner,” Ito added.
The coming weeks will be critical as Japan, South Korea, and other major auto-exporting nations prepare their responses to Trump’s sweeping tariffs.
