Shigeru Ishiba Speaks Out: US Car Tariffs Have 'Extreme

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According to a report by Kyodo News on March 28th, Japanese Prime Minister Shigeru Ishiba made it clear during his parliamentary defense that the impact of the United States' 25% tariff on imported cars on the Japanese economy is "extremely serious". Shigeru Ishiba said that the Japanese government will study the "most effective methods" to make the United States realize that tariff policies are not beneficial to itself. ​

Previously, according to the Japan News Agency, on March 27th, the Chief Cabinet Secretary of Japan, Lin Fangzheng, expressed "extreme regret" regarding the US car tariffs. Shigeru Ishiba stated on the 27th that the Japanese government has once again requested the United States to exclude Japan from the tariff list, and emphasized that Japan has invested in the United States, created a large number of jobs, and paid higher levels of wages. ​

The automotive industry plays an important role in the Japanese economy and is one of the pillar industries in Japan. According to statistics from the US Department of Commerce, Japan ranks second with $39.9 billion in passenger car imports in 2024, accounting for 28% of Japan's total exports to the US. The US is Japan's largest destination for car exports. The imposition of car tariffs by the United States is expected to increase the cost of Japanese car exports by 25%, seriously weakening the price competitiveness of Japanese cars in the US market. According to Caixin News Agency on March 28th, the highest possible impact of US car tariffs on Japan's economic value could be 13 trillion yen, which accounts for over 2% of Japan's nominal GDP. Even if Japan's car exports and production to the US only decrease by 10%, it would still result in an economic loss of 1.3 trillion yen. ​

The automobile industry chain is long and has a wide range of impacts. The reduction in automobile exports will not only affect the performance of Japanese automobile manufacturing companies, but also have a chain reaction on upstream and downstream industries such as steel and machinery, causing heavy damage to the Japanese economy. ​

Regarding the opposition party's call for countermeasures, Shigeru Ishiba said that the Japanese government is "studying all options" but must consider what measures are most in line with Japan's national interests. Many government officials have stated that they are unlikely to take countermeasures this time. An official from a certain economic department pointed out that Japan lacks export goods that can be used for retaliatory tariffs to trouble the United States, making it difficult to counter the United States through retaliatory tariffs. ​

The US car tariff policy has not only sparked reactions from countries such as Japan, but also many opposing voices within the US. Many business groups in the United States have criticized the policy, stating that it will also cause irreparable damage to the American automotive industry. The Center for Automotive Research in the United States pointed out that car tariffs will increase the cost of purchasing cars for American consumers by thousands of dollars, affect new car sales, and lead to unemployment. Tesla CEO Musk also stated in a post that the impact of tariffs on Tesla remains significant.