Many Japanese businesses caught in the crossfire of the U.S.-China trade war are facing an unsavory dilemma: Either make massive changes to how their products are assembled or bide their time until a compromise between the world's two largest economies is reached.

While many businesses have chosen the latter strategy, the U.S. decision Thursday to impose a 25 percent tariff on an additional $16 billion in Chinese exports — bringing the total levied by each side in excess of $100 billion — may continue to push businesses operating in China toward a more drastic route.

"If tariffs are instituted for a long period of time, some companies will have to make the management decision to move their manufacturing bases out of China," said Hiroshi Kubotani, a senior economist at Nippon Life Insurance Research Institute.