A strong U.S. security ally with a large trade surplus, Japan has few options for retaliating against the tariffs. Instead, it is bracing for an economic hit.

Shares of Japanese carmakers slumped after US President Donald Trump slapped a 25% tariff on all auto imports, raising concern that it will hurt sales in the key American market.

U.S. tariffs on imported vehicles and auto parts threaten catastrophic profit losses for Japanese carmakers, potentially triggering a recession in Japan and impacting global trade.