The government is eyeing a fresh economic package to alleviate the impact of rising prices and recent tariffs imposed by the United States on households and businesses.

Amid an increasingly uncertain economic outlook and a series of electoral tests in the summer, growing consensus has emerged within the ruling Liberal Democratic Party-Komeito coalition over the necessity to intervene and extend emergency relief already in place.

Opinions seem to diverge over the exact content and the scope of the package, however, with Komeito openly pushing for an initial stage of cash handouts followed by a tax cut, and the LDP avoiding any clear commitment.

“Amid the current surge in the price of commodities as well as the spreading impact of the U.S. tariffs, we believe that the most effective measure is to directly reduce the burden on households and businesses through a tax cut,” Komeito leader Tetsuo Saito told a party meeting Thursday morning, without adding any specifics on the concrete plan.

Speaking during a television program on Wednesday, LDP policy chief Itsunori Onodera showed a more restrained stance.

“At this stage, we haven’t gathered enough information on the repercussions of the tariffs,” Onodera said. “In order to make effective moves, we need to gather relevant information in a speedy manner and implement good policies.”

In a wave of levies imposed on over 60 countries by the U.S. government, Japan was initially hit with a 24% blanket levy — only for the rate to be reduced to 10% following U.S. President Donald Trump’s sudden backtrack on Wednesday. Tariffs on automobiles and auto parts remain in place.

After a first set of targeted measures to protect small businesses and industries affected by the fallout, pressure is mounting on the government to expand their reach. Media reports have suggested an initial round of universal cash handouts worth ¥30,000 ($204) to ¥50,000.

The debate is expected to intensify in the coming weeks.

In the midst of negotiations over the fiscal 2025 budget last month, the Upper House caucus of the LDP and Komeito had called for an economic package with an eye on the July election of that chamber of parliament.

After giving the idea an initial nod, Prime Minister Shigeru Ishiba was forced to take a step back, leaving space for government intervention but denying any additional budgetary measures.

However, for all measures not included in the fiscal 2025 budget approved earlier this month, the government would need to draft a supplementary budget subject to approval in parliament and convince segments of the LDP traditionally resistant toward any tax cut.

Currently lacking a majority in the Lower House, Ishiba's minority government — already struggling with low approval ratings — would require external support from the opposition, which is largely in support of tax cuts.

The Democratic Party for the People submitted its proposal for an economic package to the government on Thursday afternoon.

After meeting with Chief Cabinet Secretary Yoshimasa Hayashi, DPP leader Yuichiro Tamaki told reporters Hayashi denied any intention to draft a supplementary budget or cut the consumption tax.

In last October’s Lower House election, the DPP proposed lowering the consumption tax to a single universal rate of 5%.

In a news conference on the same day, Nippon Ishin no Kai co-leader Seiji Maehara hinted his party is considering including a cut in the consumption tax for food products as part of its proposal for an economic package.

“Any intervention should focus on the system,” Maehara said, expressing his party’s opposition to cash handouts. “The response must by no means be a handout-style thing."