While South Korean imports to the U.S. face 25% tariffs, the same as Trump promised in April, the rate on Japan has been raised by 1 percentage point to 25%.<\/p>\n
Exports \u2014 including services \u2014 made up almost 22% of Japan’s GDP in 2023<\/a>, according to the latest data from the World Bank, and 44% of South Korea’s GDP in 2023.<\/a><\/p>\n Currently, imports of automobiles and auto parts to the U.S. incur a 25% tariff, while steel and aluminum attract a 50% levy on most countries.<\/p>\n Automobiles are Japan’s largest exports to the U.S. and are also among South Korea’s top exports. South Korea was also\u00a0the fourth-largest exporter of steel to the U.S.<\/a>\u00a0in 2024, according to the International Trade Administration under the U.S. Commerce Department.<\/p>\n Japan’s Prime Minister Shigeru Ishiba reportedly said<\/a> the country “actively seeks the chance of an agreement that benefits both countries, while protecting Japan’s national interest.” In May, Ishiba said<\/a> that his country will not accept a deal that does not see the removal of auto tariffs.<\/p>\n The newly announced tariffs will lower Japan’s GDP by 0.1 percentage point by end-2026, according to Norihiro Yamaguchi, Lead Japan Economist at Oxford Economics.<\/p>\n “Given that the economy is already suffering from high tariffs on auto and elevated global trade policy uncertainly, and also weak consumption, the impact shouldn’t be dismissed,” he told CNBC <\/p>\n Yamaguchi said that Japan’s economy will “barely grow” in the second half of 2025 and in the first half of 2026, if not falling into a recession.<\/p>\n The U.S. is Japan’s largest export market, with 21.3 trillion yen ($145.76 billion) of shipments<\/a> to the country in 2024, while South Korea exported goods worth $127.8 billion to the U.S.<\/a> in the same year, and counts the U.S. as its second-largest export market.<\/p>\n
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