Article content

(Bloomberg) — Japan’s Trade Minister said the Trump administration’s latest broadside on tariffs is extremely regrettable and pushed for an exemption, hours after the US announced new levies on Japan that were higher than expected.

Article content

Article content

Japan will be subject to a 24% across-the-board tariff starting next week, US President Donald Trump said on Wednesday in Washington, just hours before a previously announced 25% levy on all car imports was set to go into effect. 

Article content

“We’ll continue to urge the US to exempt Japan from these tariffs,” Yoji Muto told reporters on Thursday in Tokyo. “We’ll check the details of the tariff measures, assess the impact on the domestic economy, and do our best to take necessary steps.”

While there are nations that are set to be hit with higher tariffs, the levies against Japan are more than many had expected. It’s higher than the EU’s 20%, and more than double the 10% baseline tax applied to all nations, despite promises from Japan to boost investment into the US to $1 trillion. Japan has refrained from taking retaliatory steps against previously announced auto tariffs.

Nomura Research Institute estimated that Trump’s ‘reciprocal’ tariffs may reduce Japan’s annual growth rate by 0.59 percentage point. The new levies are set to take effect on April 9, after the 10% baseline charge on every nation takes effect after midnight Saturday.

“Japan — very very tough,” Trump said in Washington Wednesday. “They were charging us 46% and much higher for certain items like cars, you know little items like cars. 46%, we’re charging them 24%.”

Article content

Article content

Trump was referring to the tariff level that the US perceives as Japan putting on America, although the full calculation method for reaching that number wasn’t immediately clear.

Japan doesn’t charge tariffs on US car imports, but US carmakers have long complained about perceived non-tariff barriers including stringent safety standards. A report by the US Trade Representative issued March 31 outlined a number of areas of US concern including cars, digital markets and pharmaceuticals.

Japanese leaders including Prime Minister Shigeru Ishiba have repeatedly called for an exemption from the tariffs, citing the country’s standing as the biggest investor in the US. Ishiba also pledged to buy more US liquefied natural gas during a February summit with Trump that appeared to go well.

“This is a shift that could deal a serious blow to Japan’s economy,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “The tariffs could shave Japan’s economic growth by around 0.5 percentage point or more. That’s not small for an economy with a low potential growth rate.”

Article content

The yen was trading higher versus the dollar Thursday morning, while the benchmark Topix index dropped as much as 4.3%.

The government earlier said it plans to set up about 1,000 consultation centers for concerned companies, and bring in loan support. 

At the heart of the trade tensions is Trump’s persistent discontent over the gaping trade deficit the US has with other nations including Japan. Japan’s trade surplus with the US in 2024 stood at ¥8.6 trillion ($58.2 billion), the fifth largest on record and way above average levels during Trump’s first term.

Meanwhile Ishiba has pledged to protect jobs in the auto sector after Trump announced the auto tariffs, which the ruling Liberal Democratic Party’s policy chief said may create “a big economic crisis for Japan.” The levy, which will hit fully-assembled vehicles first, is set to also expand to automobile parts.

Last year cars and car parts accounted for a little over one-third of Japan’s exports to the US, its biggest export destination. Auto-related companies including material providers employ 5.58 million people in the country, or 8.3% of the total workforce, according to the Japan Automobile Manufacturers Association.

The impact will also go beyond Japan’s direct car exports to the US. 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 Japan’s Trade Ministry. Japanese automakers manufacture 3.3 million cars within the US itself.

—With assistance from Isabel Reynolds.

Article content