As Japan plans additional economic measures, including a possible supplementary budget, to soften the impact of new U.S. tariffs, negotiators continue their struggle to dig out the meaning behind Donald Trump’s thinking.

The U.S. president on April 3 announced increased tariffs on imports from around the world, including a 24-percent “reciprocal” tariff against Japan.

Prime Minister Shigeru Ishiba told reporters that Trump’s announcement was “extremely disappointing and not what we wanted.”

He said the Japanese government would ask the U.S. side to reconsider the move. This approach, however, has repeatedly failed with the Trump administration.

Ishiba emphasized his government will steadily implement his previously announced measures to help small and mid-sized companies weather the storm. He said he has also ordered the ruling Liberal Democratic Party to consider further countermeasures against the tariff.

The government will discuss details of the additional economic measures on the assumption the tariff will affect a broad range of Japanese industries.

Several Cabinet members said they expect Ishiba to order the formulation of a supplementary budget bill for fiscal 2025 as early as this month. The spending package could be huge, given the need for countermeasures against inflation.

Leaders of the ruling and opposition parties met on April 4 to discuss the U.S. tariffs.

The ruling coalition appears intent on quickly getting all parties on the same page, now that it needs cooperation from opposition parties to pass bills in the Diet.

TRUMP’S THINKING BAFFLES

Japan was unable to avoid Trump’s “tariff attack.”

The U.S. tariff on automobile imports took effect on April 3, and the reciprocal tariff was higher than what the Japanese government had expected.

Tokyo plans to continue discussions with Washington. But some Japanese officials say that no matter how much they talk with their U.S. counterparts, they still cannot get a grasp of what Trump is thinking.

The Japanese government continued negotiations with the U.S. side until the last minute.

Trade minister Yoji Muto met online with U.S. Commerce Secretary Howard Lutnick early on April 3, but Lutnick did not listen to Muto’s arguments. There are no signs that negotiations will restart anytime soon.

One senior official of the trade ministry involved in the negotiations sarcastically said, “It’s like a dictatorship.”

According to a source, when Muto visited the United States and spoke directly to Lutnick and other officials on March 10, he was told to bring “something big.”

However, it was unclear what that meant.

In subsequent working-level discussions, the Japanese side also tried to uncover Trump’s intentions, but to no avail.

“No matter who I talk to in the U.S. administration, none of them knows what Trump is thinking,” a senior Japanese government official said. “We don’t even know what Trump wants to negotiate on.”

Another trade ministry official even suggested, “It’s a strategy of the U.S. side to deliberately not create a stage for negotiations.”

ELUSIVE STRATEGY

Other countries have been unable to devise a “strategy” to handle Trump.

Trump has said the tariffs are designed in part to bring manufacturing back to the United States.

On March 24, South Korea announced that Hyundai Motor Co. would invest $21 billion (about 3.1 trillion yen) in the United States.

However, just two days later, Trump announced he would impose an additional 25 percent tariff on imported cars, including those made in South Korea.

“Even if we play our cards first, the U.S. side could say ‘thank you’ and just take it all,” a trade ministry official said. “We need to figure out what really moves Trump.”

But Japan may lose a chance to negotiate if it waits for the U.S. side to make a move. And there is a time limit on when the stock of Japanese cars currently in the United States runs out.

GAS-GUZZLERS NOT POPULAR

In his speech on April 2, Trump expressed dissatisfaction with the sluggish sales of American cars in Japan.

He said that while Toyota Motor Corp. sells 1 million foreign-made cars in the United States, General Motors Co. and Ford Motors Co. only sell a small number in Japan.

Trump has emphasized his belief that Japan’s automobile market is unfair largely because of “non-tariff barriers.”

Japan does impose high tariffs on certain agricultural products, such as rice and beef, imported from the United States.

But Japan has already abolished tariffs on imported U.S. vehicles.

Yet even with no tariffs, U.S. car sales in Japan have been low.

According to the Japan Automobile Importers Association, Mercedes-Benz over the past five years has topped the list of imported cars, with annual sales of over 50,000 units, followed by other German brands.

American auto brands have remained at the bottom, with the exception of Jeep, which sells around 10,000 units a year in Japan.

For decades, U.S. administrations have said non-tariff barriers, such as Japan’s strict safety standards and vehicle inspection system, have prevented U.S. automakers from thriving in the Japanese market.

However, experts have pointed out that non-tariff barriers are not the only reason for the slow sales of U.S. vehicles.

Manabu Miura, a senior researcher at Japan Research Institute Ltd. who is an expert on the auto industry, noted that the size of U.S. car bodies and their poor fuel-efficiency are turnoffs for Japanese consumers.

German automakers have expanded sales in Japan by designing vehicles specifically for Japanese drivers, such as making them compatible with right-hand driving, Miura said.

American car makers have been slow to adopt such measures.

In addition, Ford’s sales networks in Japan became so small that it had difficulty providing its customers with maintenance and inspection services. The U.S. company withdrew from the Japanese market in 2016.

BRACING FOR IMPACT

Japanese automakers apparently intend to avoid passing Trump’s tariffs onto customers in the United States to prevent a sharp drop in sales.

“These tariff measures will have a significant impact on our business activities,” Mazda Motor Corp. said in a statement on April 3. “We will do our best to reduce direct costs of goods and fixed costs that we can control.”

Mazda also said it would try to minimize the impact on customers.

About 64 percent of Mazda cars sold in the United States in 2023 were imported from Japan, according to research firm S&P Global Mobility.

Toyota exported about 540,000 vehicles from Japan to the United States last year.

“We will continue to work on reducing fixed costs and other measures while maintaining our current operations for the time being,” the automaker said.

Masanori Katayama, chairman of Japan Automobile Manufacturers Association Inc., issued a statement on the night of April 3.

He pointed out JAMA member companies had invested more than $66 billion (about 9.7 trillion yen) in production operations in the United States by the end of last year.

The statement also said the number of vehicles produced in the United States exceeded the number of vehicles exported from Japan.

“We strongly urge the governments of both nations to engage in productive dialogue to forge a future-oriented path at the earliest opportunity,” Katayama said.

(This article was written by Kohei Morioka, Taro Kotegawa, Chinami Tajika and Nen Satomi.)