Japan Govt to Spend ¥900 Bil. in Response to U.S. Tariffs; Amount to Fund Subsidies for Electricity, Gas Bills for July to Sept.

The Yomiuri Shimbun

17:45 JST, May 27, 2025

The government decided at a Cabinet meeting on Tuesday to spend ¥388.1 billion from the fiscal 2025 budget reserve fund to respond to tariffs by the administration of U.S. President Donald Trump.

The amount will be used to fund such subsidies as those for electricity and gas bills for July to September, the first fiscal stimulus in response to U.S. tariffs. The total amount of fiscal spending to combat U.S. tariffs, including the existing budget, is expected to be around ¥900 billion.

The government compiled in April an emergency response package, which includes measures to stimulate consumption and support small and medium-sized businesses, and has now secured financial resources to implement the package.

Subsidies for electricity and gas bills are the main pillar of the package and will be funded by ¥288.1 billion from the reserve fund. A standard household is expected to pay about ¥3,000 less over the three-month period.

In addition, ¥100 billion from the reserve fund will be allocated for local government subsidies, which can be used at their own discretion to combat high prices. The amount received by local governments will increase to ¥300 billion, including their existing budgets, providing more support for hospitals that use liquefied petroleum gas as well as small and medium-sized businesses.

With the existing budget, the Japan Finance Corporation will ease requirements for safety-net loans to help small and medium-sized businesses improve their cash flows and maintain employment.

“The impact of [U.S.] tariffs is becoming apparent in some industries, as some companies expect to see a decrease in profits,” said Prime Minister Shigeru Ishiba at a meeting of the Comprehensive Response Headquarters for U.S. Tariff Measures on Tuesday. “I want you to carefully listen to the voices of those on the ground that are changing moment by moment, and to increase your sensitivity to understand the impact of the tariffs.”

In preparation for the possible prolonged tariffs, the government intends to compile a supplementary budget for fiscal 2025 to implement additional measures.