TOKYO: Japan seeks to pull together a wide-ranging deal to negotiate with Washington on US tariffs, as the Asian nation’s stocks plummet further amid fears of a widening trade war.
Prime Minister Shigeru Ishiba told parliament he would strongly urge President Donald Trump to drop the planned US levies on Japanese imports, first by calling the president.
The move comes after Trump signalled that he wasn’t planning to claw back the tariffs that had roiled financial markets worldwide.
“We must make it clear that our country is not doing anything unfair,” Ishiba said. Tokyo is scrambling to coordinate its response after being caught off guard by Washington’s move to slap a 24% tariff on its goods with effect from tomorrow.
Its main stock gauges have fallen the most among major Asian indexes this month as traders brace for a growing trade war after Beijing unveiled commensurate levies on American goods.
“Stocks had already dropped to an extreme level, but now the market seems to be factoring in China’s retaliatory tariffs and the fact that Trump is not backing down,” said Yusuke Sakai, senior trader at T&D Asset Management.
“The situation has developed beyond a Trump ‘shock.’ We’re now looking at the possibility of a global economic recession.”
Ishiba said Japan should be seen as fair and objective, and added that he intends to head to the United States as soon as possible.
Finance Minister Katsunobu Kato said on Sunday that Ishiba had instructed him to closely watch financial markets as well as investors’ behaviour.
Over the weekend, Ishiba said Japan’s approach to resolve the crisis could include proposals over liquefied natural gas (LNG), cars, agriculture and national security, according to local media.
Policymakers have said they won’t rule out any options in response, but haven’t given any clear indication that Tokyo would take retaliatory measures against the United States.
During a summit with Trump in February, Ishiba promised to buy more LNG from the United States and raise Japan’s investments into the country to US$1 trillion.
Ishiba and other top officials have repeatedly touted Japan’s standing as the biggest investor in the United States, including factories built by Japanese automakers that have created jobs for Americans.
The broader Topix slumped as much as 9.6% to levels last seen in August while the blue-chip Nikkei slid to the lowest since October 2023 intraday. — Bloomberg
