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Japan’s prime minister said “every option” was under consideration and South Korea promised an urgent reaction as Donald Trump increased his trade war, revealing 25 percent of US car imports.
Shigeru Ishiba’s comments in Japan’s parliament came after the last Salvo of Trump’s trade, which he said would come into force on April 2. Washington is expected to implement a series of reciprocal tariffs against US partners and allies on the same day.
Asian cars are expected to be among the most affected. Japanese automobile shares crashed between 2 percent and 5 percent on Thursday, while those of South Korean Hyundai and its associates rang about 4 percent.
“We have to think about the best option for Japan’s national interest,” Ishiba said. “We are considering every option in order to achieve the most appropriate response.”
His comments came after European Commission President Ursula von der Leyen said the EU was also appreciating its options.
Japan’s senior spokesman Yoshimasa Hayashi described the fees, which would hit a first industry widely as the driving force of the economy as “extremely repentant”. He added that the developing trade policy of the Trump administration can have a major impact on bilateral connections, the global economy and the multilateral trading system.
The Ishiba meeting in February with Trump in Washington was initially greeted as a success to reassess the US-Japan alliance strength.
But traders in Tokyo said the uncertainty of Ishiba’s tone – along with the language “every option” – hinted at the increase of panic in Japan for the solidity of the relationship.
Japan has in recent weeks lobbied Washington for a tariff exemption, highlighting his status as the largest foreign direct investment supplier in the US
The country’s economy and the Minister of Trade visited Washington this month, but efforts did not provide the exceptions Japan had hoped.
“Japan is the largest investor in the United States, so we wonder if it makes sense for (the Trump administration) to implement uniform fees for all countries. This is a point we have raised and we will continue to do so,” Ishiba said.
Japanese manufacturers have built significant production facilities in the US but their supply chains are highly dependent in Canada and Mexico.
Japan is the largest exporter of US -finished vehicles after Mexico, where Japanese companies are the main manufacturers. Japan sent cars worth $ 40 billion to SH.BA in 2024, representing 28.3 percent of its general exports to the US
Goldman Sachs Analysts said the impact on Japanese exports can be “big” because cars and parts make up such a large part of exports to the SH.BA
But they said the overall economic impact would be “somewhat limited” as Japan would not lose competition to other car imports, assessing the hit on GDP at 0.1 percentage points.
Masanor Katayama, president of the Association of Vehicle Manufacturers in Japan, a lobby group, had previously warned that “significant production regulation” would be required whether US tariffs would enter against imports from Japan, Mexico and Canada.
But Julie Bote, a Pelham Smithers analyst, said the fee pressure could “ironically” force the fragmented Japan carnation industry to consolidate as smaller groups would need support.
South Korean Industry Minister Ahn Duk-Geun said that Korean manufacturers would undergo “significant difficulty” due to tariffs and promised to announce the emergency measures next month after a meeting Thursday with industry executives.
Hyundai, the Hybrid and Electrical vehicle factory, whose $ 7.6 billion in Georgia began operations on Thursday, has also unveiled plans to expand US production capacity awaiting Trump’s tariffs.
The car manufacturer on Tuesday announced $ 21 billion investment in the US, including a $ 5.8 billion steel factory in Luiziana, as well as a 1.2MN vehicle production target in the country, from 700,000 currently.
