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(Bloomberg) — Tokyo needs to prepare for the tariffs President-elect Donald Trump has pledged against China, Canada and Mexico and adjust supply chains to reduce collateral damage on Japan Inc., according to one of the nation’s top security officials. 

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Akihisa Nagashima, national security adviser to Prime Minister Shigeru Ishiba, said in an interview with Bloomberg on Thursday that he had “frank” discussions on tariffs with members of Trump’s team during a recent visit to the US.

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“I came to the realization that Japan must be prepared for Trump following through on his plans,” Nagashima said. 

Trump threatened 25% tariffs against Canada and Mexico last month, saying he would enforce them if those countries failed to take stronger action against the flow of migrants and fentanyl into the US. Trump also said he would impose additional 10% tariffs on goods from China. 

The tariffs would likely prompt Japan to try to cut reliance on the three nations, where some Japanese companies operate and Japanese-made parts are sent to make finished products that are shipped to the US, according to Nagashima. 

“Japanese companies will of course make efforts to reorganize supply chains, and I believe that Japan as a nation will also make such efforts,” Nagashima said. “That will be economically rational.” 

Trump also threatened global tariffs of up to 20% during his presidential campaign that could hit Japan directly. The incoming president has previously criticized Japan’s trade surplus with the US despite Japan being one of the largest foreign investors in America. 

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“Trump has two major themes in his mind: job growth and reducing the trade deficit,” Nagashima said. “He seems to use tariffs as a leverage to achieve other policy goals. In that sense, I wonder if there will be some requests for Japan.” 

Nagashima spent several days in Washington last month meeting about 20 people, about half of whom he said are set to be part of Trump’s diplomatic and security teams. A clear takeaway from the meetings was that Trump won’t impose his propensity for bilateral trade deals on security matters, Nagashima said. The new US administration will likely honor the two nation’s trilateral and quadrilateral security partnerships with other nations like South Korea, Australia, the Philippines and India, Nagashima said. 

“There’s no question that Trump is confident on bilateral deals, but my understanding is that he won’t destroy all the multinational frameworks and reset all the deterrence and response capabilities that we have accumulated so far,” he said. 

The adviser said it was critical for Japan to emphasize how its defense build-up was helping regional security and the contributions Tokyo was already making to the US economy by investing and creating jobs. Still, Nagashima declined to weigh in on US political opposition to a bid by Nippon Steel Corp. to buy United States Steel Corp., which includes guarantees of job security for American steel workers.

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“I think it is important to communicate closely with each other, not only about this deal, but also about the implications of investment from Japan and how it will lead to job growth,” he said.

Nagashima is also the head of the Japan-South Korea parliamentarians association, and said he was concerned about political upheaval in Seoul resulting from President Yoon Suk Yeol’s failed attempt to impose martial law. Under Yoon, South Korea has grown closer to Japan, deepening a three-way security partnership with the US.

Nagashima said a worsening security picture in Northeast Asia, including threats from North Korea, made it unlikely Seoul would make any far-reaching policy changes on cooperation with allies even if there is major political change.

“We will cooperate with the US side and make efforts to deepen cooperation with South Korea,” he said.

—With assistance from Yuki Hagiwara.

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