TOKYO: Japan’s government warned Thursday of a “significant impact” on its economic ties with the United States  and on global trade  after President Donald Trump announced import tariffs on cars.

Tokyo is a close economic and strategic US ally, with its firms the biggest investors in the United States and one in 10 Japanese jobs connected to the auto sector. Trump announced on Wednesday 25 percent tariffs “on all cars that are not made in the United States” effective 12:01 am (0401 GMT) eastern time on April 3.

Prime Minister Shigeru Ishiba, who last month held friendly talks with Trump at the White House, said Japan was reviewing an “appropriate” response.

“Japan has made significant investments and significant job creation, which doesn’t apply to all countries… We are the number one (country) in investment in the United States,” Ishiba added.

“The US president’s understanding on this is significantly deepening. However, various things are happening, so we are considering all kinds of countermeasures,” he said.

Chief government spokesman Yoshimasa Hayashi went further, calling the tariffs “extremely regrettable” and warning of major effects. We believe that the current measures and other broad-based trade restrictions by the US government could have a significant impact on the economic relationship between Japan and the US, as well as on the global economy and the multilateral trading system,” Hayashi told reporters.

In response to this announcement, we have again told the US government that this measure was extremely regrettable and we strongly urged the US government to exclude Japan from the scope of this measure,” Hayashi said.

Trump’s announcement hammered carmakers in Asia. The world’s top-selling automaker Toyota at midday was down 2.7 percent, while Nissan shed 2.6 percent and Honda was off 2.7 percent.

In South Korea, Hyundai shares dipped 4.0 percent. Contacted by AFP, Toyota was not immediately available for comment on Thursday. A Honda spokesman told AFP: “We need to study the impact of the tariffs on our businesses, then we will take measures to minimise the impact.”

The auto industry is a huge pillar of the Japanese economy, with vehicles accounting for roughly a third of Japan’s 21.3 trillion yen ($142 billion) of US-bound exports in 2024.

Earlier in March, the chair of the Japan Automobile Manufacturers Association (JAMA) warned of fallout from US trade protectionism. A 25 percent tariff “would have a negative impact overall on the economies of the United States and Japan”, Masanori Katayama said.

– US-Japan ties –
Japanese ministers have been lobbying their US counterparts to secure tariff exemptions for goods like steel and vehicles, but these requests have been denied.

The Trump administration says levies will raise government revenue, revitalise American industry and press countries on US priorities.

But targeting imported cars could strain ties with close US partners. About 50 percent of cars sold in the United States are manufactured within the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers.

Deputy Foreign Minister Takehiro Funakoshi spoke on Thursday morning with US counterpart Thomas Landau and “conveyed Japan’s position regarding the tariff measures”, the government said.

“The two sides concurred to continue working closely together to elevate the Japan-US Alliance to new heights and to realize a free and open Indo-Pacific based on the rule of law, building upon the outcomes of the Japan-US Summit Meeting in February,” a statement added.

US Defense Secretary Pete Hegseth is due to hold talks with Japanese counterpart Gen Nakatani in Tokyo on Sunday.-AFP