Trump's tariffs lead Japan to reduce his forecast of economic growth

The growing list of the most important economies that warn of weaker growth due to US tariffs has a new member.

The Bank of Japan said on Thursday that the Japanese economy in the financial year, which began on April 1, would grow by 0.5 percent. That is sharp Downgrading of 1.1 percent The central bank forecasted in January.

The Bank of Japan explained the change and cited “trade and other guidelines”, which led to a slowdown in the economy in overseas and a decline in domestic corporate profits. The outlook was published together with the announcement that the central bank would keep interest rates at 0.5 percent unchanged.

President Trump's tariff threats show the economic prospects all over the world. In April, the International Monetary Fund reduced its prospects of 2025 for all group of 7 nations, including Germany and Japan, the third and fourth largest economies in the world, which are largely due to US tariffs.

In Japan, Mr. Trump's new taxes – including a tariff of 25 percent on imported cars – are already very occupied to the economy. The country also has a potentially higher long taxes of 24 percent, which the prime minister claims to cause a national crisis if they are not negotiated lower.

While Japan has shifted a large part of its manufacturing base overseas in recent decades, it still exports a considerable number of products such as cars to the USA. Objects produced by Japanese companies outside of Japan and then sent to the USA are also pending in front of higher tariffs.