TOKYO, May 27 (Xinhua) -- Japan, along with China and the European Union (EU), has not shied away from voicing its ardent protest to the administration of U.S. President Donald Trump's decision to look into hiking the rates of imported vehicle and parts' tariffs, to, in some cases, as much as 25 percent.
The Japanese government stands firmly against Washington's latest move towards unilateral protectionism with Japan's top government spokesperson Chief Cabinet Secretary Yoshihide Suga telling a press briefing on the matter here recently that "any trade measures should be consistent with World Trade Organization (WTO) agreements," adding that he would carefully monitor the situation.
Japanese Trade Minister Hiroshige Seko, for his part, pulled no punches when it came to offering his view on Washington's latest protectionist moves, stating recently that "Such a move would plunge the global market into turmoil. The WTO rules should be adhered to," Seko also remarked, in support of Suga's comments and in line with the government's position.
Seko said he will tell U.S. trade officials that any such measures must be consistent with the WTO's multilateral trade system and that Japan will keep a watchful eye on how the U.S. newly launched investigation shapes up.
As many Japanese senior ministers and the hierarchy of Japan's automakers have consistently pointed out that the United States is the biggest market for Japanese cars, with automakers here increasingly shifting production hubs to the United States, providing jobs for Americans and helping with its economic growth.
As for exports to the U.S. from Japan, according to the Japan Automobile Manufacturers Association, Japanese carmakers exported around 1.77 million units to the United States in the business year ended March, with exports from here to the United States actually marking a downward trend recently.
If Trump decides to make it financially preclusive for exporters to maintain their level of exports, then more companies may chose to open production hubs in the United States, which while being a boon in some areas, will, ultimately lead to the hollowing out of Japan's domestic industry, analysts here have pointed out.
According to Takeshi Miyao, an analyst at Tokyo-based auto market researcher Carnorama, the new tariffs would "hit Mazda Motor especially, and automakers that do not have manufacturing bases in the U.S."
"Other companies will be forced to adjust the proportions of manufacturing between their home countries and the United States, possibly forcing them to invest in greater capacity in the United States."
"A downward revision in earnings might be required for this term," Miyao also added.
Japan's, as with other countries' firm backlash to the potential hike of auto import tariffs by Washington comes as the U.S. Commerce Department has launched a probe into whether auto imports into the United Sates pose a threat to the U.S. economy and its national security.
Local auto analysts here are struggling to find the logic or plausibility to Trump instructing the U.S. Commerce Department to investigate the impact of vehicle and auto parts imports on national security.
"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," U.S. Commerce Secretary Wilbur Ross was quoted by local media as saying.
"The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair national security," Ross also said as quoted by the Japanese media.
Hisao Katayama, a senior equity analyst at Nomura Securities Co., told Xinhua that in the end, cool heads would prevail, and losses for exporters may not be as hefty as first thought.
"The new tariff hike could lead to increased employment in the auto sector in the U.S., but looking at the big picture, it would bear an overall negative impact on the U.S. economy," Katayama proffered.
"And no such moves towards protectionism can occur in a vacuum, especially in a new world leaning towards multilateral free trade agreements. Other countries (including Japan) can and will take retaliatory tariffs trade measures against the U.S. on sectors or products that might be economically sensitive and hurt the U.S. economy," said Katayama.
Along with the Japanese government, Japan's biggest automaker has also blasted Washington's latest move to tighten up yet another trade loop in its march towards protectionism.
"We believe free and fair trade is the best way to create sustained growth for the auto industry and provides more choices and greater value for American consumers," Toyota said in a statement here recently, adding that a national security probe leading to higher tariffs is "a determination which seems implausible."
Toyota, for its part, as a heavy-hitter for the U.S. market, highlighted the fact that it has 1,500 dealers and employs 136,000 people in the United States, and the Japanese automaker plans to open its 11th U.S. manufacturing plant there soon.
The Japanese auto giant manufactured nearly 12 million cars in the United States last year, with Toyota stating that, "It has been a significant contributor to both U.S. employment and growth."
