US President Donald Trump’s tariffs on Japanese goods have been described as a “national crisis” by Japanese Prime Minister Shigeru Ishiba. The remarks came ahead of cross-party discussions aimed at reducing the impact of the tariffs on Japan’s export-dependent economy.
Trump announced a 24% tariff on Japanese imports, a move that targets Japan as part of a broader “reciprocal” tariff strategy. Japan is one of the largest investors in the United States, but these new levies are expected to severely affect the relationship. Ishiba, in a statement to parliament, expressed that the government is doing everything it can to mitigate the situation, but he urged a “calm-headed” approach in negotiating with the US.
In addition to the 24% import tax, Trump has imposed a 25% tariff on automobile imports, which took effect this week. Japanese officials have been attempting to arrange a call between Ishiba and Trump after their positive February meeting at the White House. Foreign Minister Takeshi Iwaya, during discussions with US Secretary of State Marco Rubio in Brussels, strongly urged the US to reconsider the “extremely regrettable” tariffs.
The Japanese stock market reacted negatively to the tariffs, with the Nikkei 225 index falling 2.75% on Friday, adding to a 2.7% drop on Thursday. The broader market decline mirrored a sharp drop in the S&P 500 on Wall Street.
Ishiba emphasized that the government would take all necessary measures to support domestic industries and safeguard jobs. His meetings with political leaders were aimed at preparing a supplementary budget to address the economic fallout.
The Japan Chamber of Commerce and Industry (JCCI) warned that the tariffs could have a dire impact on Japan’s economy, particularly on small and medium-sized businesses. They called for ongoing negotiations to seek exemption from the tariffs and for measures to support businesses during the crisis.
The Japan Automobile Manufacturers Association (JAMA) highlighted the significance of the US market for Japanese automakers, who have invested more than $66 billion in US manufacturing, generating over 110,000 direct jobs in the US and supporting millions more.
The trade deficit between Japan and the US stood at nearly $70 billion in 2024. Japan exports primarily vehicles, auto parts, machinery, and electronics to the US, while imports from the US are largely chemicals, plastics, rubber, and agricultural products. The White House has argued that Japan imposes a 700% tariff on US rice, a claim that Japan’s farm minister has called “incomprehensible.”
The automobile sector is a key driver of Japan’s economy, employing millions. Experts estimate that the tariffs could shave as much as 0.7% off Japan’s GDP, although some analysts predict a smaller impact.
