Japanese minister suggests Trump does not clearly understand how trade works

The minister told the Associated Press a trade war between the US and China would damage the global economy

Mr Seko says that the brewing trade war between the US and China could disrupt the global economy (AP)

Japan’s trade minister has said President Donald Trump’s tariff policies towards his country and others show the American does not have a clear understanding of how trade works.

That minister said in interview with the Associated Press, that the US president did not appear to understand the importance of free trade or the contributions that Japanese companies made to the US economy. And, he said, Tokyo may be forced to take action if the US went ahead with its threat to place a 25 per cent tariff on Japanese auto parts.

“Japanese auto makers are a major contributor to the American economy,” said Hiroshige Seko, the country’s minister of economy, trade, and industry. “If the Japanese auto industry is weakened, it will not be able to invest in the US”.

Mr Seko also said that he was concerned with what appeared to be an escalating trade dispute between the US and China that has led both countries to imposing tariffs on $50b worth of goods. Those tariffs and threats from the world’s largest economies, Mr Seko said, threatens the entire world economy.

“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 US, and the effects are already being felt,” he said of the tariffs that have targeted a range of items from auto parts, chemical products, motorcycles, and antennas.

He continued: “Ultimately it will hurt the US and Chinese economies.”

Mr Trump made China and trade a signature talking point during his 2016 campaign, claiming that China and other countries around the world were taking advantage of the United States with trade imbalances that hurt American workers.

Since then, he has put pressure on several of America’s biggest trading partners, imposing sanctions on China and more traditional western allies like Canada, while threatening steep taxes on cars from the European Union.