Tariffs, Iran, and Crude Oil: Three Looming Storms
With tariff wars compounded by a US-Iran conflict and a Hormuz Strait blockade, oil prices soared. Despite a 15% auto tariff cap for Japan, combined risks hit the economy.
Middle East Crisis Hits Tariff War: Combined Risks Become Reality
The "reciprocal tariffs" enacted by the Trump administration in April 2025 continue to shake the global economy as of April 2026. Compounded by a military strike on Iran leading to a blockade crisis in the Strait of Hormuz, Japan faces a triple whammy of tariffs, crude oil, and commodity prices.
Where Tariffs Stand Today
Between the US and China, the initial retaliatory cycle of 145% vs. 125% settled into a temporary agreement in May 2025, bringing effective US tariffs on China to around 30% (effectively around 50% when combined with previous tariffs). Japan's negotiation-first strategy succeeded, resolving both auto and reciprocal tariffs at 15% in August 2025. However, the 25% tariff on automotive parts remains, with tariff costs for Japan's seven major automakers totaling 1.4 trillion yen in the first half of FY2025 alone. The EU has also agreed on a 15% cap, though renegotiation risks linger.
"Operation Epic Fury" and Soaring Crude Oil Prices
On February 28, 2026, the US and Israel launched large-scale airstrikes targeting Iran's nuclear and missile sites. The Islamic Revolutionary Guard Corps declared a blockade of the Strait of Hormuz, causing WTI crude to temporarily spike to $120 per barrel. As of April 5, 2026, it remains elevated at around $112.
For Japan, the Strait of Hormuz is a lifeline, accounting for approximately 74% of its crude oil imports. If the blockade is prolonged, a release of national petroleum reserves becomes a realistic prospect. According to Teikoku Databank, about 2,800 food items raised prices in April 2026 alone, severely straining household budgets alongside rising utility bills and gasoline prices. The Japan Research Institute estimates a risk of dragging down GDP growth by up to 1%.
Negotiations Continue but the Outlook Remains Opaque
As of April 2026, the US and Iran are negotiating a ceasefire framework. Traffic through the Strait of Hormuz has recovered to about 8 vessels per day, but remains significantly reduced compared to normal levels. On the tariff front, confusion persists in the US, with the Supreme Court ruling reciprocal tariffs unconstitutional. With two crises unfolding simultaneously, strengthening risk management in both exports and energy is urgent for Japanese enterprises.
【Reference Materials】
Nikkei "Full List of Reciprocal Tariffs Released by US: Japan 24%, China 34%" https://www.nikkei.com/article/DGXZQOCB031J90T00C25A4000000/
JETRO "One Year Since Trump Tariffs Started: Looking at Changes in US Trade" https://www.jetro.go.jp/biz/areareports/2026/2ea5c348bcac23e9.html
White House "Operation Epic Fury" Announcement https://www.whitehouse.gov/releases/2026/03/peace-through-strength-president-trump-launches-operation-epic-fury-to-crush-iranian-regime-end-nuclear-threat/