By The Straits Times | Created at 2025-03-27 02:53:17 | Updated at 2025-04-05 15:19:24
1 week ago
TOKYO - Japanese Prime Minister Shigeru Ishiba said on March 27 Tokyo will put “all options on the table” in dealing with Washington’s announcement to impose a 25 per cent tariff on automobile imports.
US President Donald Trump on March 26 unveiled a 25 per cent tariff on imported cars and light trucks starting next week, widening the global trade war he kicked off upon regaining the White House this year.
“Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we’ve been making and will continue to do so,” Mr Ishiba told parliament.
“We need to consider what’s best for Japan’s national interest. We’re putting all options on the table in considering the most effective response,” Mr Ishiba said, without elaborating on the possible steps Tokyo may take.
Analysts say the move could deal a heavy blow on Japan’s economy given its reliance on auto exports to the United States.
Shares in Japanese auto makers fell sharply in early trade on March 27.
Automobiles made up 28.3 per cent of Japan’s total exports to the United States in 2024, the biggest ratio among all items, according to Ministry of Finance data.
The auto industry makes up roughly 3 per cent of Japan’s gross domestic product (GDP) and has been the driver of recent wage hikes, as automakers distribute the huge profits they reaped overseas to their employees.
Mr Takahide Kiuchi, executive economist at Nomura Research Institute (NRI), expects a 25 per cent increase in US auto tariffs to push down Japan’s GDP by around 0.2 per cent.
“The Trump tariff has the potential to immediately push Japan’s economy into deterioration,” he said.
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