Photo/Illutration Automobiles for export at Yokohama pier (Asahi Shimbun file photo)

Trying to anticipate what U.S. President Donald Trump will do next is a bit like throwing out a possible date for when the Big One will hit Tokyo again. In short, it is very difficult.

A week ago, Japanese officials were backslapping over the outcome of Prime Minister Shigeru Ishiba’s first face-to-face meeting with Trump at the White House.

Those close to Ishiba were especially concerned beforehand that Trump might bring up tariffs against Japanese imports, but the topic was never raised, according to sources.

So those same officials were floored when Trump on Feb. 13 announced reciprocal tariffs on foreign products. More troubling was the threat of sweeping tariffs if non-tariff barriers in other countries were deemed to hurt the U.S. economy.

Because Japan was not excluded from the measures, steps will need to be taken to deal with what an Ishiba aide described as “an emergency situation facing the national economy.”

As one senior administration official put it, “There is a possibility this could develop into one in which (the United States) says we will continue with preferential treatment as long as you agree to our conditions.”

The inclusion of non-tariffs barriers in the U.S. study of trade practices by trading partners could influence whether tariffs are eventually imposed on Japan.

A particular concern is the automobile sector. Although Japan does not impose tariffs on U.S. auto imports, Trump has long criticized the flood of Japanese vehicles to the United States.

During his first term, he cited preferential tax treatment in Japan on minicars as a non-tariff barrier. Depending on the conclusions reached by the U.S. study, tariffs might be imposed on Japanese auto imports as early as April.

“Even if non-tariff barriers are criticized, it will not be easy to establish a rationale to explain how that would translate into some sort of tariff,” said a high-ranking official of a ministry involved with economic policy. “Japan will not be placed at an immediate disadvantage because it will take ages to look into the issue of barriers by America’s  trading partners.”

Another high-ranking ministry official suggested Japan might be better off waiting for the next move by the U.S. government, noting that the Trump administration “has not made any specific demand for eliminating non-tariff barriers.”

If automobiles are targeted, the effect on Japan could be huge, according to Takahide Kiuchi, an executive economist at Nomura Research Institute Ltd.

“Initially, reciprocal tariffs were thought to be for agricultural products, but now there is a greater possibility that automobiles could also be targeted,” he said. “If that happens, the effect on the Japanese economy will be several degrees greater.”

(This article was written by Kohei Morioka, Akifumi Nagahashi and Shinya Tokushima.)

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