Japan’s economy already contracted in the fourth quarter of 2019 and is now under more pressure as the coronavirus slows production and consumption.
Japan is set to increase its sales tax to 10 per cent from 8 per cent on October 1.
Japan is set to cut duties on US farm products, but it is unclear if the US will guarantee not to impose punitive import duty on Japanese car imports.
The likes of Toyota, Asahi Breweries, Uniqlo, and Muji are all keeping a close eye on tensions, with sales of Japanese beer, cars and clothing in South Korea declining.
New American tariffs would hit smartphones, computers and other products for which Japan is a large supplier of components and fabricating machines.