Japan hits back at US tariffs

Japan is considering “all possible options” in response to America announcing tariffs on imports of motor vehicles and automotive parts.

Prime Minister Shigeru Ishiba says various options are available to his government and it now needs to assess what course of action will be most effective. “We’re keeping all possibilities in mind.”

He didn’t mention any possible concrete responses to protectionist measures implemented by the US President Donald Trump’s regime

And Ishiba did not directly answer a question at a press conference on March 27 on whether new tariffs would violate a 2019 trade agreement in which Japan lowered tariffs on US beef and pork and products to avoid higher duties on vehicles exported to the US.

At a meeting in parliament, Ishiba, pictured, stressed Japan’s investment record. “We’ve made investments in the US, created jobs and paid the highest wages,” he said. “Japan’s investment in the US is among the highest. In fact, it ranks first.”

The Japanese government must now ask “whether it is truly appropriate to apply the same measures to all countries equally”.

Tokyo has failed on multiple occasions to persuade Trump’s administration to exempt Japan from new tariffs.

“The fact these measures have been announced without excluding Japan is extremely regrettable,” said Trade Minister Yoji Muto.

He added the government will examine the impact of new tariffs on industries and employment, and ensure necessary measures, such as financial support, are implemented.

Trump announced on March 27 (NZ time) that 25 per cent tariffs on all motor vehicle and automotive part imports would be imposed from April 3, claiming such importations “threaten to impair” national security.

Following that announcement, Japan made another request for exemption, said Chief Cabinet Secretary Yoshimasa Hayashi.

Japan’s automotive exports to America were ¥6 trillion – or around US$40 billion – in 2024, which was 28.3 per cent of total exports to the country and the largest single category of exports to the US, according to government data.

Once the 25 per cent tariff is implemented, Japan’s domestic automotive production could slump by 4.3 per cent, according to an estimate by the Japan Research Institute.

In Tokyo trading, carmakers’ shares dropped on news of the tariffs, with Toyota falling as much as four per cent on the morning of March 27.

Japanese marques are reportedly working to limit the damage of any new tariffs. Honda will produce its next Civic model in Indiana instead of Mexico, Reuters reported earlier this month.

Isuzu announced this week that it will now buy batteries from Cummins in Columbus, Indiana, for its electric F-Series, which is set to be rolled out in 2027.

Last week, Masanori Katayama, chairman of the Japan Automobile Manufacturers Association, warned of the impact of US trade protectionism at a press conference in Tokyo.

“We are concerned that the additional 25 per cent tariff on automobiles… would have a negative impact overall on the economies of the US and Japan,” he said.

“If it happens, considerable production adjustments might occur,” added Katayama, who is also chief executive of Isuzu Motors.

Annually, Japanese carmakers export around 1.37 million units to the US, down from a peak of 3.43m in 1986. These exports are necessary to offer marques’ full product lines to American motorists, said Katayama. He added Japanese brands have created jobs in the US and function as members of corporate America.