After being slammed with double-digit tariffs by key allies, Japan finds it has few retaliatory options.
Since President Trump launched widespread tariff threats in January, Japan has pursued a settlement strategy, with Prime Minister Isbaiba pledging in February to raise US investments to $1 trillion.
Until the day before Trump's tariff announcement on Wednesday, Tokyo's top executives said they hope Japan will escape. Those hopes were shattered when Trump said imports from Japan would face 24% tariffs. Last week, he said that cars, Japan's top exports to the US, are subject to a 25% tax.
Other locations affected by US tariffs (such as the European Union, Canada, China) have declared their intention to retaliate with their own taxes on American goods, but Japanese officials have refrained from talking about similar moves.
This is because the importance of Japan's economy and trade with the US makes it difficult to do so.
Over the past few years, inflation, driven primarily by rising energy and food costs, has skyrocketed in Japan, causing tension in its economy. Japan's imports from the US are mainly products that include natural gas and agricultural products.
So, imposing retaliation fees on US imports is “self-destruction” and “simply a viable option,” said Stephen Anglick, a senior economist at Moody Analysis in Tokyo. “The only remaining strategy is to change the narrative and highlight Japan's willingness to import more goods,” he said.
American officials, including Trump, have repeatedly raised concerns about Japan's non-tariff trade barriers, citing particularly the restrictions on importing agricultural products, such as rice and motor vehicle standards, which they argue that they place US manufacturers at a disadvantage.
At a press conference on Thursday, Japan's top branch director Hayashida Yoshizaki Yoshii declined to comment on Japan's willingness to consider making concessions in trade negotiations with the US. Other officials, including the Prime Minister, refrained from speaking of retaliation.
Japan's standards for certification of vehicles used in the country are based on those established by the United Nations, Hayashi said. He also said he explained to his counterparts in Washington the details and logic behind Japan's US import policy.
“Nottheless, it is very unfortunate that the US government has announced recent mutual tariff measures that refer to the US,” Hayashi said. “In any case, Japan continues to urge the United States to consider the measures.”
