Japan PM Ishiba vows ‘unprecedented’ response to Trump tariffs amid ‘national crisis’

TOKYO – Tariffs imposed on Japanese goods by US President Donald Trump’s administration are a “national crisis” that requires an “unprecedented” response, Prime Minister Shigeru Ishiba said on April 4 as he prepared to hold cross-party talks on mitigating the impact.

Japanese firms are the biggest investors into the United States, but

Mr Trump on April 2 announced a hefty 24 per cent levy on imports

from Washington’s close ally.

The levies “can be called a national crisis and the government is doing its best with all parties” to lessen the impact, Mr Ishiba said in Parliament.

He called, however, for a “calm-headed” approach to negotiations with the Trump administration, which has also imposed 25 per cent tariffs on auto imports that came into force this week.

He said the government should decide on the most effective response to the tariffs, leaving the door open to possible retaliatory steps or taking the issue to the World Trade Organisation.

Bank of Japan governor Kazuo Ueda said, meanwhile, that tariffs “can be a factor in downward pressure on the global and national economies”.

On April 3, Mr Ishiba told his ministers “to study closely” the tariffs and “to take all measures necessary including financing support” for domestic industries and protecting employment, government spokesman Yoshimasa Hayashi told reporters.

“As it is necessary for all parties including the opposition bloc to study and take measures, Prime Minister Ishiba will meet with each of the party leaders and listen to their opinions (later in the day),” Mr Hayashi said on April 4.

Mr Ishiba’s meetings with party leaders are aimed at laying the groundwork for the supplementary budget Bill, as his minority government needs cooperation from the opposition to pass it in Parliament, the Asahi Shimbun reported.

On April 4, Mr Hayashi repeated that Mr Trump’s sweeping new tariffs

are “extremely regrettable”

and that Japan has “serious concerns” about whether they comply with World Trade Organisation rules and US-Japan trade agreements.

Mr Ishiba has instructed his ministers to “continue strongly demanding” that the US review the tariff measures, Mr Hayashi said.

Japan’s main Nikkei 225 index fell more than 3 per cent on April 4, adding to a 2.7 per cent drop a day earlier after the S&P 500 on Wall Street dropped by the most in a day since 2020.

‘Extremely grave’

The Japan Chamber of Commerce and Industry (JCCI) said Mr Trump’s tariffs will “have an extremely grave impact on the Japanese economy”.

“We strongly urge the government to continue its persistent negotiations for the exemption from tariff measures and to take all possible measures to minimise the impact on small and medium-sized enterprises and small businesses... by developing a detailed consultation system and strengthening cash management support,” the JCCI said on April 3.

The Japan Automobile Manufacturers Association (Jama) also called for government assistance for its members, which make up an important pillar of the world’s fourth-biggest economy.

The industry has “consistently called for fundamental reform to simplify and ease the burden of automobile-related taxation, (and) we kindly request comprehensive support measures to ensure that Japan’s automotive industry can maintain its foundation as a manufacturing base through the revitalisation of the domestic market”, it said.

Jama said its members have invested a cumulative total of more than US$66 billion (S$88 billion) in US manufacturing as at 2024, generating more than 110,000 direct US jobs and supporting more than 2.2 million others.

“We have long believed that becoming an integral part of the US auto industry – through local investment and job creation – is the most sustainable path forward for the auto industries of both countries,” it said.

Japanese carmakers ship about 1.45 million cars to the US from Canada and Mexico, where they operate factories, Bloomberg News reported.

By comparison, Japan exports 1.49 million cars directly to the US, while Japanese automakers make 3.3 million cars in America.

In Japan, the auto sector is a key industry, employing about 5.6 million people directly or indirectly.

Vehicles accounted for around 28 per cent of Japan’s 21.3 trillion yen (S$194.3 billion) of US-bound exports in 2024. AFP, KYODO NEWS