Japan has joined a growing list of nations, including Spain and Canada, that are assembling aid plans to help blunt the domestic impact of President Trump’s tariffs.
On Tuesday, Japan approved a $6.3 billion spending package to “fully support” businesses and households adversely affected by the tariffs, Cabinet Secretary Yoshimasa Hayashi said in a briefing. The funds will bolster the finances of small and medium-sized businesses and subsidize household energy costs, he said.
The measures underscore the precarious position the Japanese government is in ahead of an upper house election likely to take place in July. On top of managing an expected economic slowdown caused by U.S. levies, officials are dealing with public anger over higher consumer prices and growing pressure to reduce Japan’s ballooning government debt.
President Trump has paused a so-called reciprocal tariff of 24 percent on Japanese goods until early July. But the country’s automotive sector, the backbone of the economy, is already reeling from a 25 percent U.S. tariff on finished automobiles and car parts.
Earlier this month, Toyota Motor, Japan’s largest company, projected a $1.3 billion hit to its profits for April and May alone because of the tariffs. Honda Motor and Nissan Motor have similarly forecast sharp declines in their earnings. Nissan is considering closing two plants in Japan as part of its restructuring efforts. The automaker is also planning to shift some production from Japan to the United States to skirt the tariffs.
The broader concern is that the auto levies will threaten jobs and profits at major automakers and across a dense network of smaller companies that supply parts.
Economists have estimated that the higher auto tariffs alone could significantly curtail Japan’s economy this year. Factoring in the wider disruptions caused by global trade tensions, officials have warned that overall growth could be more than halved.
The ruling party’s stimulus package lands as Japan is grappling with debt, which ranks among the heaviest among advanced economies. In recent months, Japan’s prime minister has characterized both the nation’s burgeoning debt and U.S. tariffs as reaching crisis levels.
Before Japan, a number of countries have assembled funds to help their economies cope with escalating tariffs. Spain unveiled a $15 billion tariff-aid package last month. Canada has also earmarked billions of dollars to help its workers and businesses weather turbulent trade with the United States.
Japan’s top tariff negotiator, Ryosei Akazawa, met in Washington last week with his counterparts in the Trump administration. The talks have moved slowly, bogging down at least in part because Trump officials have signaled that Japan’s primary demand — an exemption from the auto tariffs — is not up for negotiation.
While Japan has yet to secure concessions, Mr. Akazawa expressed optimism that an agreement could be ironed out during a Japan-U.S. meeting in mid-June, set to be held on the sidelines of a Group of 7 summit meeting in Canada.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
Hisako Ueno is a reporter and researcher based in Tokyo, writing on Japanese politics, business, labor, gender and culture.
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