Trump’s 25% auto tariffs: Japan to put ‘all options on the table for most effective response’

Japanese Prime Minister Shigeru Ishiba said they will do whatever is best for the country’s interest after US President Donald Trump announced 25 per cent tariffs on all imported automobiles. This order would impact all cars and light trucks that are not manufactured in the US. 

PM Ishiba told the parliament: "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…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,"

Trump’s auto tariffs come as a shocker for Japan, a nation reliant on auto exports, especially to the US. Automobiles constitute 28.3 per cent of all of Japan’s exports to the US, representing the largest category. 

The Japanese auto industry, a pivotal economic pillar contributing about 3 per cent to Japan's GDP, has also driven recent wage increases domestically. Analysts, including from Nomura Research Institute, predict the tariff could lower Japan's GDP by approximately 0.2 per cent, reflecting the industry's critical role. 

The sudden tariff imposition has also led to a sharp decline in shares of major Japanese automakers. Toyota, Nissan, and Honda experienced significant drops, with Mitsubishi, Mazda, and Subaru also facing substantial losses. The auto sector also sustains around 10 per cent of Japan's jobs. 

The US President, announcing the 25 per cent auto tariffs on Wednesday, stressed that it as a major step toward reshaping the country’s trade policies. “What we’re going to be doing is a 25 per cent tariff on all cars that are not made in the United States. This will be permanent. We start off with a 2. 5 per cent base, which is what we’re at, and go to 25 per cent.”

Trump said that the hike would benefit American industry and consumers and will continue to spur growth like one “haven’t seen before”.