Japanese Prime Minister Shigeru Ishiba said on Friday that US President Donald Trump’s tariffs on Japanese goods have caused a “national crisis.” Japanese companies are the largest investors in the United States, but President Trump has announced a hefty 24 percent tariff on imports.
Japan’s close ally, the United States, will impose heavy tariffs on Japan as part of a global tax rollback on Thursday, which will have a major impact on the Japanese economy. “As this move could cause Japan to face a ‘national crisis’ economically, the government is working with all parties to do its utmost to mitigate its impact,” Ishiba told parliament.
He called for a “calm-led” approach to talks with the Trump administration, which has also imposed a 25 percent tariff on Japanese car imports that took effect this week. Bank of Japan Governor Kazuo Ueda said, “The tax could cause downward pressure on the global and national economies.”
Government spokesman Yoshimasa Hayashi said on Thursday he had instructed his ministers to “closely study” the tax and take all necessary measures, including financial support for domestic industry and job protection. According to the Asahi Shimbun daily, Ishiba’s meeting with party leaders on Friday was aimed at laying the groundwork for a supplementary budget bill. His minority government needs the opposition’s support to pass any bill in parliament.
On Friday, Hayashi said Trump’s new tariffs were “extremely regrettable” and that Japan had “serious concerns” about whether they would comply with World Trade Organization rules and the US-Japan trade agreement. The Japan Chamber of Commerce and Industry (JCCI) has said that Trump’s tax hike will have a serious impact on the Japanese economy.
“We strongly urge the government to continue negotiations for tax relief and take all possible measures to mitigate the impact on SMEs and small businesses by developing a comprehensive consultation system and strengthening cash management support,” the JCCI said in a statement. The Japan Automobile Manufacturers Association (JAMA) has also called for government support for its members, who are a key pillar of the world’s fourth-largest economy.
He added, “The industry has consistently called for fundamental reforms to simplify and reduce the burden of vehicle (car)-related taxes, and we kindly request comprehensive support measures to ensure that Japan’s automotive industry can maintain its foothold as a manufacturing base through the revival of the domestic market.”
According to JAMA, its members have invested more than $66 billion in American manufacturing by 2024, creating more than 110,000 direct American jobs and supporting more than 2.2 million. “We have long believed that becoming an integral part of the American auto industry through local investment and job creation is the most sustainable path for the auto industries in both countries,” the statement said.
According to Bloomberg News, Japanese automakers ship about 1.45 million cars to the United States from Canada and Mexico. Japan exports about 1.5 million cars directly to the United States, while Japanese automakers produce 3.3 million cars in the United States. In Japan, the auto sector is a major industry, directly or indirectly employing approximately 5.6 million people. Vehicles accounted for about 28 percent of Japan’s 21.3 trillion yen ($142 billion) exports to the United States last year.
