Published: 14:43, April 1, 2025
Japan vows support for businesses worried about Trump tariffs
By Bloomberg
Japan Prime Minister Shigeru Ishiba speaks during a news conference at the prime minister's office in Tokyo, Japan, on April 1, 2025. (PHOTO / POOL VIA AP)

Japanese Prime Minister Shigeru Ishiba announced support measures to help businesses cope with the impact of US tariffs as concerns grow that they could spark an economic crisis.

Ishiba said the government will set up about 1,000 consultation booths across Japan to help small businesses navigate the effects of the tariffs. While he previously said he wouldn’t rule out countermeasures against US tariffs on car imports, he made no mention of any retaliatory actions this time.

“We’re working on this matter nonstop, even on weekends,” Ishiba said, adding that once there’s more clarity on the tariffs, he would travel to the US "without hesitation".

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Japan is preparing for President Donald Trump to unveil so-called reciprocal tariffs on April 2, aimed at pushing other countries to lower their trade barriers against American goods. While it’s still unclear what the tariff rates will be or which countries will be affected, the Trump administration has criticized Japan’s high tariffs and called for the US trade deficit with Japan to be eliminated.

Shortly before Ishiba spoke, Liberal Democratic Party policy chief Itsunori Onodera raised concerns about the 25 percent auto tariff set to take effect on April 3. The auto levies mark a significant expansion of Trump’s trade fight, and will likely ensnare some of the biggest automotive brands in countries including Japan, Germany and South Korea.

“I feel that this may become a big economic crisis for Japan,” Onodera said as he led a party workshop to discuss the trade tensions. “Especially given the breadth of the supply chain of the auto industry, I think this will become an enormous problem that will have an impact on all regions across Japan.”

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The tariffs on all US car imports will impact Japanese automakers beyond just their direct exports. Japanese carmakers ship about 1.45 million vehicles to the US from their factories in Canada and Mexico — just shy of the 1.49 million cars exported directly from Japan to the US, according to the Trade Ministry. Japanese automakers manufacture 3.3 million cars within the US itself.

“We will continue to seize various opportunities to strongly call for an exemption,” Japanese Trade Minister Yoji Muto said on Tuesday. “We need to continue negotiations and communicate with the US. As for domestic measures, we are considering measures such as cash flow support.”

Japan’s repeated pleas for an exemption from the US tariffs have gone largely unheeded so far. With a national election coming up this summer and his approval ratings still low, Ishiba has promised to take steps to protect jobs from the impact of the tariffs.

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He also said the government will support businesses by helping them improve productivity, develop new ventures and expand sales through various measures.

Despite the frustration over auto tariffs, Onodera said none of the LDP lawmakers at the workshop had brought up retaliation. Instead, discussions focused on finding new markets for Japan’s automakers to expand into.

Reflecting on his time as defense minister that overlapped with Trump’s first term, Onodera said he’s familiar with the unpredictability that makes it hard to anticipate the impact of upcoming policies, but the effects could be widespread.

In order to avoid having to raise prices, some companies are pressuring suppliers to refrain from passing on rising costs, which “has the effect of making it harder for them to raise wages for workers,” he said.