(March 28): Japanese Prime Minister Shigeru Ishiba pledged to take thorough measures to protect local jobs from the Trump administration’s 25% tariff on US car imports, which he said will have a “very big” impact on the nation’s economy.

Ishiba emphasised the need to consider measures to help Japanese companies with financing while the government tries to grasp the entire scope of the impact on the nation’s key industry. 

“I recognise that the impact that this will have on the economy will be very big,” Ishiba said in Parliament on Friday. “We also need to consider cash-flow measures for companies. We will take all possible measures so that this won’t affect domestic industries or employment.”

The prime minister spoke for two days in a row about the car tariffs. US President Donald Trump announced the fresh tariff will go into effect at 12.01am Washington time on April 3, initially targeting fully assembled vehicles. By May 3, the scope will expand to include major automobile parts, according to the proclamation. Nations including Japan are also bracing for an even broader announcement of so-called reciprocal tariffs around the same time. 

Last year car and car parts accounted for a little over one-third of Japan’s exports to the US, its biggest export destination. Auto-related companies including material providers employ 5.58 million people in the country, or 8.3% of the total workforce, according to the Japan Automobile Manufacturers Association.

The Japanese government is considering easing non-tariff barriers in order to seek an exemption from the US tariffs, the Asahi newspaper reported citing unnamed government sources. Ministries are mulling relaxing industrial standards for automobiles and home appliances, as well as quarantine for agricultural products, it said.

Japan upholds persistent non-tariff barriers against US businesses in a range of industries including cars, the digital economy and cosmetics, according to the American Chamber of Commerce in Japan (ACCJ), which submitted its thoughts on the matter in March to the US Trade Representative.

Japan’s car safety standards impose unnecessary costs and restricts access for American automakers, according to the ACCJ. Tokyo’s recent regulations on smartphone software also unfairly targets US firms over domestic and Chinese competitors, while Japanese rules on biopharmaceutical pricing undervalue US innovation, the business lobby said. 

Since his inauguration, Trump hasn’t singled out any of these specific non-tariff barriers, as his focus appeared to be on bringing investments into the US rather than gaining greater access to other markets including Japan’s.

US carmakers have long complained about Japan’s stringent safety standards, as they struggle to make inroads into the Japanese market despite Tokyo imposing no tariffs on imported American cars. Analysts say that their limited advances in Japan has a lot more to do with their inability to adjust to the local market. For instance, American vehicles remain left-hand drive, the opposite to the local standard.

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