Predicting President Donald Trump's next move is proving to be as uncertain as forecasting a major seismic event, making it extremely difficult for political observers to be prepared for upcoming actions. Just a week after a high-profile meeting between Prime Minister Shigeru Ishiba and the U.S. president at the White House, there was a sense of cautious optimism among Japanese officials, who were relieved that tariffs on Japanese imports were not discussed during their encounter.
However, on February 13, Trump announced the imposition of reciprocal tariffs on foreign products, stirring concerns with the possibility of further steep measures if non-tariff barriers in other countries are found to negatively impact the U.S. economy. Since Japan was not exempted from these sweeping measures, officials are now faced with what one Ishiba aide described as a critical situation for the national economy, with potential long-term implications if the U.S. decides to condition preferential treatment on compliance with new terms.
A major focal point of concern is the automobile sector. Despite the absence of tariffs on U.S. auto imports into Japan, Trump's longstanding criticism of Japanese vehicle sales in the United States has cast a shadow over future trade relations. Previously, he pointed out that Japan's preferential tax treatment for minicars acted as a form of non-tariff barrier, and there is now growing apprehension that tariffs might be imposed on Japanese auto imports as early as April, pending the conclusions of an ongoing U.S. study.
High-ranking officials from Japan’s economic ministries have expressed mixed views on the situation. One official noted that although establishing a clear rationale for translating non-tariff barrier criticisms into tariff policies would be challenging, Japan could initially avoid immediate disadvantages as any investigation into these practices by U.S. trading partners would take considerable time. Meanwhile, another official suggested a cautious approach, recommending that Japan wait to see how U.S. policy develops, as there have been no definitive American demands to remove non-tariff measures thus far.
The potential impact on Japan's economy could be substantial if the automobile sector is targeted, with experts indicating that the combined effects of tariffs on both agricultural and automotive products might be significantly greater than initially anticipated.