**Tokyo**: Prime Minister Shigeru Ishiba has stated Japan will consider all options to respond to recent US tariffs on imported automobiles, expressing concerns over the economic implications and questioning the rationale behind uniform tariffs on significant investors such as Japan. Economic analysts warn of potential GDP decline.
Japanese Prime Minister Shigeru Ishiba announced on 27 March that Japan will explore “all options on the table” in response to the recent decision by the United States to impose a 25 per cent tariff on imported automobiles. This announcement follows US President Donald Trump’s declaration on 26 March regarding the new tariffs, which are set to take effect next week, signalling an escalation in the global trade tensions initiated upon Trump’s return to the White House earlier this year.
During a parliamentary session, Prime Minister Ishiba expressed concern over the implications of uniform tariffs, questioning the rationale behind such measures directed at a country that is a significant investor in the United States. He stated, “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.” Furthermore, he emphasised, “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,” although he did not provide specific details regarding potential actions that Japan might undertake.
The economic ramifications of this tariff could be severe for Japan, given the country’s heavy reliance on the automobile sector for exports to the US. Data from Japan’s Ministry of Finance show that automobiles constituted 28.3 per cent of the nation’s total exports to the United States in 2024, making it the most significant export category. Analysts predict that the tariffs may negatively impact Japan’s economy, with Takahide Kiuchi, an executive economist at the Nomura Research Institute, estimating a potential GDP reduction of approximately 0.2 per cent as a direct consequence of the tariff increase. Kiuchi warned, “The Trump tariff has the potential to immediately push Japan’s economy into deterioration.”
The immediate effects of this trade policy have already begun to manifest, as shares in Japanese automobile manufacturers experienced a sharp decline in early trading on 27 March, reflecting investor apprehension regarding the economic outlook for the sector.
The overarching situation highlights the intricate ties between Japan and the United States, particularly in the automotive industry, and raises questions regarding future economic strategies as both nations navigate a complex trade landscape amidst ongoing tensions.
Source: Noah Wire Services
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