Japan’s trade minister has said President Donald Trump’s tariff policies towards his country and others show the American does not have a clear understanding of how trade works.

That minister said in interview with the Associated Press, that the US president did not appear to understand the importance of free trade or the contributions that Japanese companies made to the US economy. And, he said, Tokyo may be forced to take action if the US went ahead with its threat to place a 25 per cent tariff on Japanese auto parts.

“Japanese auto makers are a major contributor to the American economy,” said Hiroshige Seko, the country’s minister of economy, trade, and industry. “If the Japanese auto industry is weakened, it will not be able to invest in the US”.

Mr Seko also said that he was concerned with what appeared to be an escalating trade dispute between the US and China that has led both countries to imposing tariffs on $50b worth of goods. Those tariffs and threats from the world’s largest economies, Mr Seko said, threatens the entire world economy.

“This works as absolutely no plus for the world economy, and Japanese companies are shipping parts to China to finish them as products there that are exported to the US, and the effects are already being felt,” he said of the tariffs that have targeted a range of items from auto parts, chemical products, motorcycles, and antennas.

He continued: “Ultimately it will hurt the US and Chinese economies.”

Trump in Helsinki: Putin meeting and protests Show all 16 1 /16 Trump in Helsinki: Putin meeting and protests Trump in Helsinki: Putin meeting and protests President Trump meets with Russian President Vladimir Putin in Helsinki Reuters Trump in Helsinki: Putin meeting and protests An advert from Finnish newspaper Helsingin Sanomat is on display in Helsinki Reuters Trump in Helsinki: Putin meeting and protests President Trump in a meeting with Finnish President Sauli Niinisto AFP/Getty Trump in Helsinki: Putin meeting and protests President Trump meets with Finnish President Sauli Niinisto in Helsinki EPA Trump in Helsinki: Putin meeting and protests President Trump talks with Finnish President Sauli Niinisto in Mantyniemi, the official residence of the Finnish President EPA Trump in Helsinki: Putin meeting and protests US, Finnish and Russian flags fly in front of the Presidential Palace in Helsinki EPA Trump in Helsinki: Putin meeting and protests A protester wears a mask featuring a portrait of Russian President Vladimir Putin during the so-called "Helsinki against Trump and Putin" demonstration on July 16, 2018, in the Finnish capital Helsinki. The US and Russian leaders opened an historic summit in Helsinki on Monday, with Donald Trump promising an "extraordinary relationship" and Vladimir Putin saying it was high time to thrash out disputes around the world. / AFP PHOTO / Jonathan NACKSTRANDJONATHAN NACKSTRAND/AFP/Getty Images JONATHAN NACKSTRAND AFP/Getty Trump in Helsinki: Putin meeting and protests Vladimir Putin gifts a football to President Trump at the press conference that followed their meeting AP Trump in Helsinki: Putin meeting and protests Trump supporters hold banners during a demonstration in Helsinki AFP/Getty Trump in Helsinki: Putin meeting and protests People protest for women's reproductive rights in Helsinki's Senate Square Reuters Trump in Helsinki: Putin meeting and protests A crowd watches the motorcade transporting President Trump through Helsinki AFP/Getty Trump in Helsinki: Putin meeting and protests Russian President Putin drives through Helsinki on his way to meet with President Trump EPA Trump in Helsinki: Putin meeting and protests A man in the audience of the joint press conference holds up a sign sign that reads "NUCLEAR WEAPON BAN TREATY". REUTERS Trump in Helsinki: Putin meeting and protests A man is removed from the joint press conference in Helsinki. Security removed the man after he pulled out a sign that read "NUCLEAR WEAPON BAN TREATY". REUTERS Trump in Helsinki: Putin meeting and protests President Trump and Russia's President Putin sit for a working lunch in Finland's Presidential Palace AFP/Getty Trump in Helsinki: Putin meeting and protests President Trump meets with Russian President Vladimir Putin in Helsinki Reuters

Mr Trump made China and trade a signature talking point during his 2016 campaign, claiming that China and other countries around the world were taking advantage of the United States with trade imbalances that hurt American workers.

Donald Trump says he's 'ready to go to 500' in tariff battle with China