Ken Moriyasu from Nikkei Asia breaks down Trump tariffs and the Japanese diplomatic dilemma
- Adam German
- Jul 9
- 2 min read
On July 7th, Nikkei Asia Washington correspondent spoke with DW News, a German public broadcaster, about what effect the 25% tariffs on Japan announced by the White House could have on the nation’s overall economy.
Below is what Moriyasu San had to say. Underneath Moriyasu San’s interview is a separate piece by NHK World News who, on July 2nd, spoke to Kumano Hideo, Executive Chief Economist of Dai-Ichi Life Research Institute about the possible long-term effects Trump tariffs could have on Japan’s automobile sector.
Ken Moriyasu of Nikkei Asia
Key Takeaways:
President Trump is slapping 25% tariffs on Japanese and South Korean imports starting August 1, with direct warnings to both countries against retaliation.
Trump frames the US trade deficit with Japan and South Korea as a national security threat, signaling a hardline stance that blends economic policy with strategic pressure.
Despite months of talks and seven visits to Washington, Japan hit a wall in negotiations, especially over sector-specific tariffs on automobiles, which Trump’s team declared off-limits for compromise.
With 30% of Japan’s US-bound exports tied to autos and parts, the tariffs strike at the core of Japanese manufacturing - while also reducing vehicle options for US consumers.
The Trump administration insists that Japan and South Korea can dodge the tariffs - but only by expanding US-based production, a demand that ignores the economic reality of low-volume imports.
Behind the scenes, Japan’s hands are tied by domestic politics. With an Upper House election looming, Prime Minister Ishiba can’t afford to make unpopular concessions - yet a brief post-election window may shift the calculus.
Moriyasu San says Trump appears willing to decouple US-China security concerns from trade policy, challenging long-held Japanese assumptions about its strategic importance to Washington.
Kumano Hideo of Dai-Ichi Life Research Institute
NHK World does not allow YouTube embeds on other websites so click here or on the above image to watch the segment on YouTube.
Key Takeaways:
(As of July 2nd) Trump was floating 30 - 35% tariffs on Japanese goods, a move that could trigger over $50 billion in losses and plunge Japan into recession, according to Kumano Hideo.
Even under a 10% tariff scenario, Japan stands to lose $25 billion, wiping out profits across key export industries - undermining Tokyo’s effort to spark inflation and drive real wage growth.
The difference is being felt: Japanese automakers have responded by cutting US export prices by nearly 19% year-on-year for May, aiming to keep sales volume steady despite the tariffs.
Japanese carmakers are doing what they can to hold the line - cutting prices and absorbing some of the tariff costs. But the strategy has limits, and profits won’t shield them forever.
The real pain is being pushed downstream, as auto giants demand lower prices from their Tier 1 to Tier 3 suppliers. Profit erosion is spreading across the entire supply chain.
Kumano warns this squeeze could accelerate the industry's long-standing dependence on supplier cost-cutting, just as Japan was finally emerging from deflation - with tariffs now threatening to undo years of recovery in a matter of months.
The tariffs aren’t an opportunity- they’re a test. Kumano says Japanese firms must pivot, shifting from a cost-focused strategy to building premium value through branding, product innovation, and smarter marketing.
