Tariff Measures under the Trump Administration
- “The Impact of Reciprocal Tariffs” Announced on February 13 -

1. On January 26, as a sanction against the Colombian government for refusing to repatriate illegal immigrants from the United States, the Trump administration declared: (a) the imposition of a 25% tariff on all imports from Colombia; and (b) the imposition of a 50% tariff one week thereafter.
   ⇒ The sanctions were subsequently withdrawn following Colombia’s agreement to accept the return of illegal immigrants.
2. On February 1, the administration announced the imposition of additional 25% tariffs on all Canadian and Mexican products (with a 10% additional tariff imposed on Canadian crude oil and other energy resources)
   ⇒ On February 4, the administration announced that the imposition of these additional tariffs on Canada and Mexico would be postponed until March 4.
3. On February 1, the administration announced an additional 10% tariff on all Chinese products, to take effect on February 4.
   ⇒ On February 4, China announced, as countermeasures, an additional 15% tariff on US coal and natural gas, and an additional 10% tariff on US crude oil and automobiles, effective on February 10.
4. On February 9, the administration declared an additional 25% tariff on steel and aluminum imported into the United States.
5. On February 13, the Trump administration instructed that the introduction of “reciprocal tariffs” should be considered. Only the concept thereof has been indicated with regard to raising US tariffs in response to tariffs and non-tariff barriers, etc. imposed by trading partners on US products, while the legal basis for raising tariffs and other details remained unspecified.
6. On February 18, the Trump administration announced, “automotive tariffs,” stating the view that additional tariffs would be around 25%, and further indicated that additional tariffs on “semiconductors” and “pharmaceuticals” were under consideration. At present, only the concept has been indicated, and while the distinctions from reciprocal tariffs, as well as the legal basis, remain unspecified, some suggest that as Section 232 of the Trade Expansion Act was used as the basis for imposing automotive tariffs during the first Trump administration, the same approach may be again taken this time. (* The legal basis for tariff imposition under US law will be covered in the next issue of this series.)
   

<Impact of Reciprocal Tariffs on Japan>
Although the specific items and rates of reciprocal tariffs remain unclear, it is anticipated that goods exported from Japan to the United States in sectors where Japan imposes higher tariffs than the United States will suffer disadvantages through this US taxation.
Moreover, there are fundamental questions as to whether it is even possible to operate a system wherein tariff rates vary for each item in each country (166 WTO member countries and regions). The following section provides simulations with respect to automobiles and alcoholic beverages.

■ “Automotive Tariffs” Pose a Greater Concern Than Reciprocal Tariffs in the Auto Sector

For example, in the case of automobiles, since automobile imports into Japan are already duty-free, reciprocal tariffs may seem to have little impact on exports from Japan to the United States, which account for roughly 30% of Japan’s total exports to the US. Rather, greater attention should be paid to the commercial distribution network where Japanese companies manufacture automobiles in third countries and export the same to the US. However, if the “automotive tariffs”, which were announced on February 18 as being increased by approximately 25%, also apply to Japanese automobiles, the impact is anticipated to be substantial.

Country of Import	Passenger Cars	Trucks	Buses	Parts, etc. (Bodies and Automobile Parts)
Japan	Duty-free	Duty-free	Duty-free	Duty-free
United States	2.5%	25% (cab chassis with a gross vehicle weight of 5 to 20 tons: 4%)	2%	2.5%
China	15%	15%	15%	6%

(Reference: Japan Automobile Manufacturers Association, Inc. (Above chart prepared with reference to the Association’s website [LINK])

In the United States, concerns have been raised about alleged non-tariff barriers, due to the limited presence of US-made automobiles in the Japanese market. It is therefore important to reiterate and explain the fair and competitive environment of the Japanese market.
The following is an excerpt from a statement by the Japan Automobile Manufacturers Association, made during the TPP negotiations, emphasizing that Japan has zero tariffs on cars, that there are no barriers to import sales, and that European automobiles have, in fact, achieved success in Japan.

2. The Detroit-based auto companies opposed Japan’s participation in the TPP negotiations because they say the Japanese auto market is closed to imports. Is that true?
No. Japan has zero import duties on cars. There are no barriers to the import and sale of foreign-made vehicles in Japan. The Japanese market is highly competitive, but European auto companies that have committed time and resources to selling there have been successful. JAMA has offered on several occasions to be of assistance to the Detroit-based auto companies in connection with difficulties they may have in the Japanese market. So far they have been unresponsive.（Japan Automobile Manufacturers Association website）

■Impact on Japan’s Agricultural, Forestry, and Fishery Exports to the United States.
Tariffs on Sake to Increase by Nearly 1400%

Among the agricultural, forestry and fishery products exported from Japan to the United States, the largest exports are alcoholic beverages (JPY 26.8 billion), yellowtail (JPY 22.2 billion), sauces and mixed seasonings (JPY 10.5 billion), and green tea (JPY 10.5 billion) (Statistics 2022, JETRO, “Country Report on Exports of Agricultural, Forestry and Fishery Products and Foods to the United States” [LINK]).

In terms of the contents of the Japan-US Trade Agreement concerning Japanese alcoholic beverages agreed in 2022, Japan did not agree to tariff reductions for alcoholic beverages other than wine (e.g. sake and shochu). As a result, Japan currently imposes a tariff of JPY 70.4 per liter (WTO bound rate, HS Code 2206.00.210).

In contrast, under the current system in the United States, duties on Japanese sake under the equivalent tariff classification are 3 cents per liter—about JPY 5 (NHK news report; US HTS Code 2206.00.45). This represents a tariff rate approximately 14 times higher than Japan’s existing rate, potentially impacting exports of Japanese sake and similar products.

Furthermore, it is reported that the United States may consider not only tariffs but also consumption taxes. Since consumption taxes are applied equally to goods produced in Japan, the legitimacy of considering such taxes raises further doubts. Nevertheless, if taken literally, the current 10% consumption tax on Japanese alcoholic beverages could also be added. If “reciprocity” is to be considered strictly, it would seem that only the difference compared to the consumption taxes imposed in the United States should be applied, but details remain uncertain.

Within less than a month of his inauguration, President Trump swiftly implemented a series of tariff policies, which are the embodiment of what he had been publicly declaring during the election campaign. Accordingly, in order to deal with President Trump’s future actions, it is essential to make predictions based on his past statements.

The future course of the Trump administration’s tariff policies remains highly uncertain. In the next issue, we will explain the legal basis for these policies. An accurate understanding of such legal basis is essential for Japanese companies, as stakeholders, to express their views, and for Japan, as a foreign government, to implement countermeasures.

*Disclaimer: The information above is current as of February 21, 2025. The content of this blog is provided for general informational purposes only and does not constitute legal advice or a legal opinion. Please note that the content may not reflect the most current legal or regulatory developments. Readers should not act or rely on any information in this blog without consulting qualified legal counsel. Transmission of this information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. TMI Associates disclaims all liability for actions taken or not taken based on any content on this site.

 

Introduction of TMI’s Customs and Duties Team and International Trade Practice Group

Our team at TMI includes attorneys who have experienced secondments at the Ministry of Foreign Affairs and the Ministry of Economy, Trade and Industry, as well as advisors formerly from the Ministry of Finance and other governmental agencies. These team members handle customs issues and other international trade matters.

International trade law, which is grounded in intergovernmental agreements such as World Trade Organization (“WTO”) agreements, the Fair Trade Agreements (“FTAs”), and the Economic Partnership Agreements (“EPAs”), etc., directly affects the activities of private enterprises. In recent years, regulatory actions by the competent authorities have intensified not only in the United States but also across Asia, South America, and other regions, further heightening risks for globally active companies. 
Drawing on extensive experience across both domestic and international trade issues, TMI handles international trade matters both at the phase of using existing systems, and of taking preventive measures.

(1) Cross-Border Practice

If our clients become involved in investigations into anti-dumping duties, countervailing duties, safeguard measures, or involved in investigations initiated by overseas authorities, or face other regulatory issues affecting trade or investment abroad, we leverage the resources of our own overseas offices as well as cooperation with foreign law firms to deliver the best advice possible. Where appropriate, we also support our clients in preparing and submitting opinions to the Japanese government in view of filing complaints to the WTO, thereby enabling our clients to raise challenges against foreign governments through the Japanese government.

(2) Domestic Practice

TMI also has extensive experience in the latest domestic practices, including advising the Japanese government in connection with international trade disputes, as well as conducting research on the application of Japanese trade laws and regulations. Our expertise further encompasses advising and representing domestic and international corporations, industry associations, and other entities, including providing filing application services for anti-dumping duties, countervailing duties, and safeguard measures on imports from foreign countries, as well as customs related services (tariff classifications, country-of-origin labeling, etc.). When necessary, our team works seamlessly with professionals across TMI in related areas such as antitrust and competition law, tax, and information and communications law to deliver integrated and comprehensive solutions.

For inquiries, please contact our team at: trade-customs(at)tmi.gr.jp (when entering the address, please replace “(at)” with “@”).

TMI Associates
Attorneys
Kazuhide Ueno, Ryoko Kondo, Shinichiro Ishihara, Shinya Sakuragi, Yu Tomii, Leo Yamada, Kotaro Kunii