Tokyo has said that it will put “all options on the table” when dealing with Trump’s tariffs.
Japanese prime minister Shigeru Ishiba said on Thursday:
Analysts have said that the move could deal a heavy blow on Japan’s economy given its reliance on auto exports to the US.
Vehicles made up 28.3% of Japan’s total exports to the US in 2024, the biggest ratio among all items, according to Ministry of Finance data.
The auto industry makes up roughly 3% of Japan’s gross domestic product (GDP) and has been the driver of recent wage hikes, as automakers distribute the huge profits they reaped overseas to their employees.
Takahide Kiuchi, executive economist at Nomura Research Institute (NRI), expects the new tariffs to push Japan’s GDP approximately 0.2% lower.
“The Trump tariff has the potential to immediately push Japan’s economy into deterioration,” he said.