Japan's PM to discuss tariffs with Trump after failed lobby for exemption

Japanese Prime Minister Shigeru Ishiba has said he plans to speak to U.S. President Donald Trump over the phone as early as next week to discuss U.S. tariff hike.

"I will talk logically about how much Japan will benefit (the United States)," Ishiba said on a TV program on Saturday, adding that Japan will consider new investments in the United States.

Ishiba also indicated that Japan has no plans to impose retaliatory tariffs against the United States, saying, "We will not go tit-for-tat."

Trump announced a new set of levies on Wednesday, imposing 10 percent baseline tariffs on imports from all trading partners and higher rates on certain nations. With a harsher-than-expected 24 percent levy on Japan, Tokyo has been lobbying for an exemption.

Ishiba plans to ask Trump to reconsider the tariffs by highlighting Japan's contributions as the largest investor in the United States, local media reported, with the prime minister saying Friday that the new U.S. tariffs had triggered a "national crisis."

Japan's failed lobby

Despite weeks of diplomatic efforts to change Trump's mind, Japan woke up Thursday to news that it would be subject to a reciprocal tariff based on what the U.S. said amounted to a 46 percent trade imbalance with its key ally.

Ishiba said on Thursday he was disappointed that his country did not win an exemption from Trump's new tariffs and promised measures to help domestic industry deal with the fallout.

Japanese officials questioned whether the tariffs were consistent with World Trade Organization agreements and questioned the accuracy of some U.S. calculations about Japan's own tariffs.

Daiwa Institute of Research estimated that Trump's 24 percent reciprocal tariffs on Japan could drag down its real GDP by 0.6 percent in 2025, after scant growth of 0.1 percent in 2024.

To cushion the blow, the Japanese government plans to make it easier for small businesses to access state-backed loans, Ishiba said.

Trade Minister Yoji Muto said his ministry set up a task force on Thursday to analyze the tariffs' impact, after his last-ditch plea to U.S. Commerce Secretary Howard Lutnick shortly before Trump's Rose Garden announcement came up empty-handed.

Trump also singled out Japan's rice market, which he said imposed a 700 percent tariff, a figure that Japanese Agriculture Minister Taku Eto said was "illogical."

"You can't arrive at the figure through any calculation. It's incomprehensible," Eto said.

Under the WTO's minimum access framework, Japan has a tariff-free rice import quota of about 770,000 metric tons a year and levies 341 yen (about $2.34) per kilogram on imports over that amount.

Japanese car makers rattled by U.S. auto tariffs

A previously announced 25 percent tariff by the Trump administration on all car imports took effect as scheduled on Thursday in the U.S., dealing a major blow to the Japanese auto industry which accounts for roughly 3 percent of GDP.

Japan could lose $17 billion in car export potential in the U.S. following Trump's decision to introduce 25 percent tariffs on the automotive sector, the International Trade Centre (ITC) said on Friday.

"Japan's automotive sector comprises 20 percent of the country's total exports and the majority of exports are headed to the U.S. market. Now the flat 25 percent tariff on the sector that came into force yesterday means that Japan could lose 17 billion dollars in export potentials in the U.S., according to our calculations," Julia Spies, ITC chief of trade and market intelligence, told reporters in Geneva.

Trump's 25 percent auto tariffs will cover more than $460 billion worth of imports of vehicles and auto parts annually, according to a Reuters analysis of tariff codes included in a federal register notice on Wednesday.

The update of Trump's auto tariff proclamation from last week included nearly 150 auto parts categories that will face tariffs starting May 3, a month after Thursday's midnight activation of 25 percent tariffs on vehicle imports.

Slovakia, Japan and Honduras are some of the countries highly exposed to U.S. tariffs on automotives, the UN Trade agency said. The U.S. market represents a large share of these countries' automotive sector exports.

The ITC said Japan may seek to diversify its export destinations for vehicles.

"Markets such as China, Germany, the Philippines and Thailand together hold unrealized export potential for Japanese vehicles that matches the estimated loss in the U.S. market," said Spies.

(With input from agencies)