Bank of Japan Governor Kazuo Ueda warned on Wednesday that new trade tariffs proposed by U.S. President Donald Trump could significantly harm global trade and slow economic growth.
Ueda highlighted concerns about the impact of these tariffs on inflation, stating that they could lead to higher U.S. inflation in the short term. However, he noted that their long-term effects remain uncertain. Higher tariffs might reduce U.S. economic growth and limit future price increases, he explained during a session in Japan’s parliament.
Ueda’s remarks came just before Trump was set to announce a broad range of trade tariffs, targeting countries with large trade surpluses with the U.S. Japan is expected to be one of the main targets.
U.S. Treasury Secretary Scott Bessent suggested that Trump plans to impose the highest tariffs, but targeted countries could reduce these tariffs by lowering their own duties on U.S. goods or implementing measures to satisfy Washington’s demands.
The potential effects of Trump’s tariffs on Japan’s economy, which relies heavily on U.S. trade, will likely influence the Bank of Japan’s decisions on interest rates in the coming months.
The BOJ is widely anticipated to raise rates as soon as May to combat persistent inflation and gradually reduce the economy’s dependence on monetary support.
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