U.S. and Japan working to announce tariffs won't stack

Japan Times

13 hours ago

The United States is working to finalize an announcement that would end the stacking of universal tariffs on Japanese goods, a senior Trump administration official said Friday.
The plans, detailed on the condition of anonymity, would resolve prolonged confusion over how U.S. President Donald Trump intended to impose levies on a key trading partner after striking a deal, and match public comments made by Ryosei Akazawa, Tokyo's top trade negotiator, after a meeting on Thursday with his counterparts in Washington.
The announcement, which could take the form of a joint statement from the two countries, would clarify that Japan — like the European Union — would see its 15% reciprocal tariff rate incorporate existing most-favored nation duties.
Akazawa, who met with Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, said U.S. officials expressed regret that the stacking rule had been applied to Japan despite a verbal agreement, and said Washington would refund any overpaid levies, he said.
"We've strongly urged our counterparts to promptly implement these measures,' Akazawa told reporters on Saturday, shortly after returning to Tokyo. He declined to comment on when a decision will be made, but made mention of the U.S.-U.K. trade pact and how it took 54 days to take effect.
"Keeping such things in mind when it comes to timing, we believe every day matters,' Akazawa said.
Japan was hit with higher-than-expected universal tariffs as part of the wave of new levies introduced by the Trump administration Thursday. While the scale of the discrepancy was likely minor, the confusion sparked renewed criticism of Prime Minister Shigeru Ishiba, who already faces calls to step down over a poor election showing.
"We have confirmed that when the U.S. side takes measures to revise the executive order on universal tariffs, they will issue another order to reduce tariffs on cars and auto parts,' Akazawa said. "We will continue to urge the U.S. side, through all available means and channels' to make those things happen, he said.
He added that he wasn't sure when the orders would be issued, but he didn't expect it to take as long as six months or a year.
Under the stacking system, the 15% tariff applied to Japan is being added to existing levies on its products. When Japan receives an exemption, Akazawa said that the 15% rate would apply to items that previously had levies of less than 15%, while items that in the past had tariffs of more than 15% will no longer face additional levies.
More importantly for the Japanese economy, carmakers are still struggling with tariffs at 27.5% — a combination of a previous 2.5% rate and a new 25% levy applied by Trump.
"With each day that passes, the losses incurred by Japanese companies are mounting,' Akazawa said, adding that some companies are seeing an hourly loss of ¥100 million ($679,000), without citing which companies they are.
"In this respect, there is no change to what we have been saying previously. We are seeking the issuance of the executive order as quickly as possible — whether by a day or even by a moment,' he said.
The lack of clarity on the timing of a promised cut to 15% is making it hard for the car companies, mainstays of the economy, to plan ahead. The auto sector employs roughly 8% of the nation's workforce and is a trend setter for wage growth, which has supported the central bank's gradual interest rate hikes.
Japan's benchmark Topix index climbed as much as 1.7% after Akazawa spoke, with a measure of automakers among sectors providing the biggest boost. Toyota and Honda each rose more than 3%.
Akazawa chalked up the discrepancies over the stacked tariffs as a misstep introduced during the administrative processing of the agreement, insisting that Japan and the U.S. were aligned on the trade deal agreed in late July. He also defended his call not to draw up the agreement in writing — a decision that has been questioned by opposition lawmakers as confusion mounted over the finer details of the deal.
Still, he did not give an indication of when the lower across-the-board and reduced auto tariffs may come into effect, instead saying it will happen "in a timely manner.' He hinted that he may continue to travel to Washington, and said he'd invited his U.S. counterparts to Japan.
"As I understand it, the U.S. side will handle the matter in a reasonable manner. That is why we are saying the tariffs will be implemented 'in due course',' he said.