Trump misunderstands trade, Japan official says

President Donald Trump’s tariff policies reflect a serious misunderstanding of the importance of free trade and Japanese companies’ contributions to the U.S. economy, Japan’s trade minister said Thursday.

Hiroshige Seko, the minister of economy, trade and industry, warned in an exclusive interview with The Associated Press that Tokyo might take action if the U.S. fulfills threats to levy a 25 percent tariff on Japanese auto imports. He gave no details but didn’t rule out retaliatory tariffs.

“Japanese automakers are a major contributor to the American economy,” Seko said in the interview at his ministry office in Tokyo. “If the Japanese auto industry is weakened, it will not be able to invest in the U.S.”

“This works as absolutely no plus for the world economy, and Japanese companies are shipping parts to China to finish them as products there that are exported to the U.S., and the effects are already being felt,” he said. “Ultimately, it will hurt the U.S. and Chinese economies.”

Seko said he empathized with Trump’s “feelings” of worry over the ballooning U.S. trade deficit. But he said Prime Minister Shinzo Abe and other Japanese officials have been patiently trying to persuade Trump that Japanese do not products pose a security threat to the U.S.

The annual U.S. trade deficit with Japan totaled more than $68 billion last year. The U.S. deficit with China was nearly $376 billion.

Trump should not blame Japan, Seko said, because the U.S. deficit with Japan today reflects years of effort by Japan to create thousands of jobs in the U.S., many of them lucrative in the auto industry, and become a major investor in the U.S.

Seko said tariffs imposed on Japanese exports of steel and aluminum, which have already kicked in, are expected to have a minimal impact on Japan because only a tiny fraction of those exports goes to the U.S.

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