Trump Tariffs to Raise Bar to Invest in US, JETRO Says

[Stay on top of transportation news: Get TTNews in your inbox.]

President Donald Trump’s tariff campaign is likely to worsen inflation and raise the bar for Japanese companies to invest in the U.S., defying the president’s aim to lure investment and revive American manufacturing, according to the chair of the Japan External Trade Organization.

Higher tariffs will raise the cost of doing business in the U.S. with more expensive materials and products, while the president’s crackdown on immigrants is also likely to worsen a labor shortage and boost labor costs, according to Norihiko Ishiguro, JETRO’s chair.

“The cost of materials and other things will increase significantly which won’t make the business environment good,” Ishiguro said in an interview with Bloomberg on March 18. Referring to Trump’s crackdown on foreign workers, he added “in our interviews with companies based in the U.S., we found some were worried that some of their workers might disappear.”

Despite Tokyo’s pleas for exemptions, Trump’s higher tariffs on steel and aluminum started hitting Japan last week and announcements are expected on new reciprocal and auto levies on April 2.

President Donald Trump speaks with Japanese Prime Minister Shigeru Ishiba in the Oval Office on Feb. 7. (Alex Brandon/AP)

“There is no doubt that Trump’s tariffs will undermine a fair and free trade order based on rules, and in particular, the automobile tariff will have a significant impact on the Japanese economy,” said Ishiguro, a former official from Japan’s Ministry of Economy, Trade and Industry.

During his meeting with Trump in February, Japanese Prime Minister Shigeru Ishiba pledged to boost Japan’s overall investment in the U.S. to $1 trillion. Japan has held the largest pile of foreign direct investment in the U.S. for the last five years, with about