TOKYO – The US government’s plan to impose an [additional 25 per cent tariff on auto imports](https://www.straitstimes.com/world/united-states/trump-ratcheting-up-trade-war-presses-ahead-with-auto-tariffs-of-up-to-25) will have an “extremely large impact” on the Japanese economy, Japanese Prime Minister Shigeru Ishiba warned on March 28, as exports are a major driver of the Asian country’s growth.
“We will think about the most effective means to make the United States understand that this will not be of benefit to it,” Mr Ishiba said during a parliamentary session, while expressing readiness to continue negotiations with Washington.
Bank of Japan (BOJ) policy board members also voiced concern about the negative impact of the tariffs on the nation’s economy, according to a summary of opinions from a March policy meeting, at a time when the central bank has become inclined to lift interest rates to curb inflation.
The BOJ “will need to be particularly cautious when considering the timing for raising the policy interest rate” since tariffs pursued by US President Donald Trump could hurt Japan’s economy, one member was quoted as saying.
Another member said that the downside risks to Japan’s economy have increased, arguing that the bank should keep the policy rate at its current level for the time being, according to the BOJ.
At its two-day meeting held last week, the bank maintained its key short-term interest rate at 0.5 per cent, citing heightened uncertainty about US trade policy. BOJ governor Kazuo Ueda said the bank will tighten monetary policy further if conditions are met. KYODO NEWS
Join [ST's Telegram channel](https://t.me/TheStraitsTimes) and get the latest breaking news delivered to you.