Japan's Prime Minister Shigeru Ishiba said Monday he had held a call with Donald Trump in which they agreed to more talks on the US president's latest tariffs, which sparked a global selloff and fears of a recession.

Japanese firms are some of the biggest foreign investors in the United States but Trump announced a hefty 24 percent tariff last week on imports from the close US ally as part of global "reciprocal" levies.

"President Trump presented his honest understanding of the current situation of the United States in the international economy," Ishiba told reporters Monday evening after the call.

"Based on today's exchange... both sides decided to designate Cabinet members to take charge and continue discussions," he said, without specifying who the ministers would be or when he would next travel to the United States.

"Japan strongly urges the United States to review its measures through these consultations," Ishiba said, adding that he had told Trump that tariffs would weaken Japanese businesses' ability to invest in the United States.

Ishiba had said earlier in the day that Japan would present Trump with a "package" of measures to win relief from US tariffs.

"We have to present a package, and we cannot present it on a piecemeal basis," Ishiba told parliament.

He said that this could include Japan's involvement in a mooted natural gas pipeline project in Alaska.

Trump said in February after talks with Ishiba at the White House that Japan would be a partner in the "gigantic" project.

Ishiba is due to hold a special Cabinet meeting on Tuesday morning to discuss how to deal with the tariffs.

Japan's main stocks index, the Nikkei 225, tumbled almost eight percent on Monday as panicked investors around the world moved into safer assets.

The Japan Business Federation (Keidanren) said the world stands at the "crossroads" of whether free trade can continue.

"The world has flourished through the free trade system and free trade since the end of World War II. The driving force behind this system is the United States," chairman Masakazu Tokura told a news conference.

"To put it in a dramatic way, we hold a sense of urgency that we stand at the crossroads of whether the free trade regime can be maintained," he said.

Trump has also imposed 25 percent levies on cars coming into the United States parallel to the 24 percent tariff on Japanese imports that takes effect this week.

The auto sector in Japan is a major pillar of the world's fourth-biggest economy, employing about 5.6 million people directly or indirectly.

Vehicles accounted for around 28 percent of Japan's 21.3 trillion yen ($142 billion) of US-bound exports last year.