Ueda urges G20 dialogue as Trump prepares sweeping trade measures
Bank of Japan Governor Kazuo Ueda warned Wednesday that President Donald Trump’s planned reciprocal tariffs could deliver a serious blow to global trade and growth, adding to uncertainty in an already fragile economic environment.
“The impact of U.S. tariff policy on the global economy is highly uncertain,” Ueda told Japan’s parliament just hours before Trump is expected to unveil new duties. “But depending on the range and scale of U.S. tariffs, they could have a big impact on each country’s trade activity.”
Trump tariffs seen as global risk
Trump’s upcoming announcement is set to include a 25% tariff on auto imports starting April 3, alongside a broader package of global reciprocal tariffs. These measures will add to existing tariffs on aluminum, steel, and all Chinese goods.
Ueda emphasized the need for international cooperation and said he would like to discuss the ramifications of U.S. trade policy with G20 finance ministers during their upcoming meetings in Washington. The spring IMF and G20 meetings are expected to focus heavily on the economic fallout of America’s tariff stance.
Global factory activity slows
March surveys showed manufacturing activity slowing in Japan, Britain, and the U.S. as businesses brace for potential disruptions in supply chains and cross-border demand. Ueda noted that aside from trade flows, tariffs could also weigh on the confidence and spending behavior of households and companies worldwide.
“While higher tariffs are likely to push up U.S. inflation in the short term,” Ueda said, “the longer-term effect is unclear, as the same tariffs could dampen economic activity and curb price growth.”
Implications for Japan’s monetary policy
Analysts say the extent of U.S. tariffs and their impact on Japan’s economy could influence the Bank of Japan’s interest rate strategy. The BOJ will hold its next policy meeting from April 30 to May 1. A Reuters poll indicates that most economists expect the central bank’s next rate hike in Q3 2025, likely in July.
While it remains unconfirmed whether Ueda will attend the G20 sessions, BOJ governors and Japan’s finance ministers traditionally participate in these meetings.