Japanese Minister of the Economy Hiroshige Seko declined Thursday to rule out retaliatory tariffs against the U.S. should it go ahead with plans to place 25 percent levies on foreign autos and auto parts.
He also warned that the Trump administration’s team has “misunderstandings” about trade issues, and that its policies would lead to less foreign investment in the U.S.
“We have to keep trying to explain our message,” Seko told the Associated Press. “We have been working to open our markets to avoid such misunderstandings, especially in the bilateral trade with the U.S.”
[Related: Japan joins U.S. allies blasting Trump’s auto tariff proposal]
The auto tariffs would hit Japan hard. Toyota Motor Corp. has estimated that Trump’s proposed tariffs would add $6,000 to the cost of each car exported to the U.S. from Japan, taking $4.2 billion a year off the manufacturer’s bottom line. However Japan is also major employer of U.S. auto factory workers, with companies like Nissan and Mazda owning plants in Tennessee, Alabama, South Carolina and elsewhere in the southern states. Japanese-owned companies produce an estimated 3.8 million cars in the U.S. annually, exceeding production by Detroit’s own auto manufacturers.
Thus, adding auto tariffs to the escalating trade fight between the U.S. would just damage all economies, Seko said. “Japanese automakers are a major contributor to the American economy. If the Japanese auto industry is weakened, it will not be able to invest in the U.S.,” he said.
[Also read: Wilbur Ross pushes back administration deadline for auto tariffs]
