Japan allocates 900 billion yen emergency relief package to counter impact of U.S. tariffs

Japan’s government wants to deploy 900 billion yen (approximately $6.3 billion) in state funds for an emergency relief package to cushion the blow from U.S. tariffs. The initiative aims to finance a comprehensive package that reduces utility costs and provides financial aid for smaller companies.

The government said it plans to utilize budget reserves and existing budget allocations, which would be decided as early as May 27. Just a month prior, Japan unveiled a package of emergency economic measures to counter the adverse effects of U.S. President Donald Trump’s tariffs.

Japan’s auto and steel sectors receive relief package

The relief package revealed on April 25 consisted of five pillars, including support for corporate financing and steps to stimulate consumption. Prime Minister Shigeru Ishiba argued that the package was a bid to alleviate concern that the U.S. levies could weigh on Japan’s exports, potentially taking a heavy toll on the broader economy.

During a meeting to discuss the package, Ishiba urged the government to make maximum efforts to ease the impact of the heightened U.S. tariffs. He also argued that U.S. tariffs could hurt Japan’s domestic industries, such as automobiles and steel, emphasizing the necessity of Tokyo and Washington working together for mutual benefit.

“It is extremely important for us to clearly convey to the United States the fact that Japanese enterprises have been making a significant contribution to the U.S. economy through investment and job creation.”

-Shigeru Ishiba, Prime Minister of Japan.

The East Asian economic giant acknowledged on Monday that both countries agreed in their latest tariff negotiations to accelerate efforts towards an agreement. Tokyo is subject to the same 10% baseline levies imposed on most nations, plus steeper tariffs on cars, steel, and aluminum. 

Trump imposed 24% reciprocal tariffs on Japan in early April but later paused them along with similar measures on other countries until early July. The East Asian economic giant is advocating for all levies on its imports announced by Trump lifted.

Tokyo’s minister of economic revitalization, Ryosei Akazawa, held a third round of talks in Washington over the weekend and is due to return this week. Japan’s top government spokesman, Yoshimasa Hayashi, said that on Monday, the two nations confirmed they’d accelerate efforts to realize an agreement that would be mutually beneficial.

Ishiba aims to advance U.S. tariff talks at the G-7 summit

Ishiba told reporters in Kyoto on Sunday that Akazawa’s latest round made progress in talks. He also suggested that he aims to advance an agreement with Trump when the two leaders meet at the annual Group of Seven gathering next month in Canada.

Japan’s economic revitalization minister held a 45-minute phone call with U.S. President Donald Trump to discuss security, diplomacy, and tariffs. They said they exchanged hope for an in-person meeting at the G-7 summit.

Ishiba also expressed Tokyo’s willingness to cooperate in shipbuilding. He noted that the U.S. has shown interest in the possibility of repairing U.S. warships in Japan and that Japan would like to assist. The country’s official said Japan has an advantage in icebreakers, such as those used on Arctic trade routes, which could become an area of cooperation with the U.S.

Tokyo proposed setting up a joint Japan-U.S. fund to help revitalize the U.S. shipbuilding industry. The country said the fund would create manufacturing jobs in the U.S. and reduce the economic and security risks associated with China.

Akazawa said on Sunday the schedule for the next Japan-U.S. talks is being arranged and that he hopes to meet U.S. Treasury Secretary Scott Bessent during his next visit to the U.S. He told reporters at Haneda Airport following his return from Washington, that an agreement will be reached only when all elements are settled as a package, meaning that until everything is agreed upon, nothing is agreed upon.

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