Japan’s Kato: US tariffs are highly disappointing
Japanese Finance Minister Katsunobu Kato told G7 countries on Thursday that “US tariffs are highly disappointing.”
Additional quotes
- US tariffs, countermeasures are creating uncertainties in financial market.
- Stressed that free trade regime promotion important.
- Constructive policy discussion important.
- No comment on Bessent's foreign exchange remarks.
- Many countries make reference to US tariffs.
- Forex rate should be determined by market.
- Excessive forex move negatively affect economy.
- In meeting with Bessent tomorrow, hope to hold talks on the basis of past understanding on the need for the two countries to coordinate closely.
- Raised China's excess capacity as an issue that needs to be resolved in the G7 meeting.
- Told G7 meeting countries need to work together to urge China to take steps to address domestic imbalances, help make the global economic system more balanced.
- US tariffs and counter-measures by some nations have heightened uncertainty, destabilised markets including FX and have negative impact on economy.
- Each country must monitor developments to maintain economic, market stability and take necessary steps while cooperating nimbly.
Market reaction
At the press time, USD/JPY is down 0.41% on the day at 142.80, little affected by these comments.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
