Understand New Trump Tariffs, Protect Japanese Investments

Will the tariffs imposed by United States President Donald Trump once more create uncertainty for Japan and the international community? On February 20, the US Supreme Court ruled that the reciprocal tariffs and other tariff measures imposed by the Trump administration on various countries and regions are illegal.

To a degree, that constrains President Trump's tactics of indiscriminately imposing high tariffs even on allies and other friendly nations. Certainly, the court's decision is welcome in that respect.

Nevertheless, Trump quickly adopted an alternative plan. From February 24, he will use Section 122 of the Trade Act of 1974 to impose an additional 10% tariff on all products worldwide. Furthermore, there is no sign of a change in his strategy. He will continue using tariffs as leverage to throw other countries off balance so they will cut deals.

Rather, we should be wary of new turmoil in the trade relations between the US and various other nations.

The Sanae Takaichi administration should seek to forge a mutual understanding with the Trump administration to ensure Japan's national interests are not harmed. We urge the Japanese government to do its best in that regard. Moreover, a Japan-US summit meeting is due to take place during Prime Minister Takaichi's March visit to the US.

*Minister of Economy, Trade and Industry Ryosei Akazawa arrives at the Prime Minister's Office on the morning of February 24. (©Sankei by Ataru Haruna)*

Clarify the New Tariffs

The Supreme Court reviewed the International Emergency Economic Powers Act used by the Trump administration as its basis for imposing reciprocal tariffs. However, the court said the IEEPA does not give the president the authority to impose tariffs. Therefore, in response, Trump invoked Section 122 of the Trade Act. That law allows additional tariffs to be applied temporarily for up to 150 days.

The Trump administration is expected to continue to use any means available to maintain high tariffs. That includes Section 301 of the Trade Act.

The summer 2025 bilateral agreement set a reciprocal tariff of 15% on Japanese imports entering the US. In addition, there was to be a 15% tariff on Japanese motor vehicles. These reciprocal tariffs are now to be replaced by a 10% across-the-board tariff.

Before anything else, the Takaichi administration needs to thoroughly understand the details of the new tariffs. That includes identifying all of the items to which the 10% or other new tariffs apply.

Protect Japanese Investments

Also, the Takaichi administration must reconfirm how the promised Japanese investment in the US will be treated. That totals $550 billion USD (approximately ￥84 trillion JPY). Moreover, the first project has already been announced. The Takaichi administration should work hard to ensure that unfavorable conditions are not imposed.

Furthermore, the Trump administration needs to answer whether it will refund the reciprocal tariffs that companies have already paid. The US administration needs to present a clear policy that domestic and international companies can accept.

Caution is warranted. The collapse of one of the foundations for tariff measures, which Trump has used as a diplomatic weapon, could significantly impact the international community.

In particular, China came into sharp conflict with the US in 2025, after retaliating for the high US tariffs. Japan must monitor how this will change US-China relations before Trump's China trip this spring.

It must also be recognized that any US-China development could have a major impact on Japan's national and economic security.