Tariffs Are Hitting Allies
- U.S. trade policy remains aggressive, keeping steep tariffs and investigating additional levies on some sectors. - Japan recorded its fifth straight fiscal-year trade deficit, $10.7 billion, after U.S. tariffs hit its auto exports. - The spillover shows American tariffs are imposing costs on allies' industrial exporters and global supply chains. (washingtonpost.com)
Japan logged a 1.71 trillion yen, or about $10.7 billion, trade deficit for the fiscal year that ended in March, its fifth straight annual shortfall, as new U.S. tariffs cut into auto exports. (apnews.com) Japan’s Finance Ministry said exports rose 4.0% in the year, while imports fell 0.5%; in March alone, exports to the United States dropped 11.2% by value as shipments of cars and auto parts weakened after the new duties. (apnews.com) The U.S. put a 25% tariff on imported automobiles and certain auto parts under Section 232, and Japan has also been exposed to a separate 24% “reciprocal” tariff rate that Washington paused for 90 days. Tokyo has been pressing for exemptions in talks with the Trump administration. (whitehouse.gov, reuters.com via aol.com) That hit lands on an ally whose carmakers are deeply tied to the U.S. market. The United States imported $51.1 billion in automotive goods from Japan in 2025, while Japanese automakers reported about $70 billion in cumulative investment in U.S. manufacturing facilities. (eurasiareview.com) The tariff campaign has not stopped at cars. On April 2, President Donald Trump imposed Section 232 tariffs on patented pharmaceuticals and their ingredients, and the White House said the action was aimed at supply chains and national security. (whitehouse.gov, whitehouse.gov) Washington has also kept revising tariffs on metals. A presidential proclamation on April 2 changed how Section 232 duties apply to steel, aluminum and copper products, expanding the reach of some levies even as it removed others. (whitecase.com) Japan has called the U.S. tariff measures “deeply regrettable.” Prime Minister Shigeru Ishiba’s government has argued the duties will hurt investment and employment in both Japan and the United States, not just Japanese exporters. (japannews.yomiuri.co.jp) Europe has made the same point in a different way. After the United States imposed new steel and aluminum tariffs in March 2025, the European Commission announced countermeasures covering €26 billion in U.S. exports. (ec.europa.eu) Japan’s annual deficit is smaller than the 22.09 trillion yen gap it ran in fiscal 2022, when energy prices surged, but the latest figures show a different pressure point: an ally’s export machine is now being squeezed by U.S. industrial tariffs instead of oil. (apnews.com) The next test is whether tariff talks produce carve-outs before more sectors get pulled in. For now, the same U.S. policy meant to shield domestic industry is raising costs for trading partners that build much of America’s supply chain. (whitehouse.gov, apnews.com)
