Japan-U.S. trade negotiations stall as Trump fumes

Japan Times

a day ago

Trade negotiations between Japan and the United States moved a step closer to failure following two days of broadsides from U.S. President Donald Trump.
'Negotiations didn't collapse,' said Ryo Sahashi, a professor at the University of Tokyo's Institute for Advanced Studies on Asia. 'But the incentives for Japan to compromise became very small.'
Trump went on Fox News on Sunday and complained about the lack of U.S.-made cars in Japan. He followed that up on Monday by taking aim at rice.
In both instances, the president indicated negotiations were effectively over and he would simply send a letter dictating what rates Japan will be paying.
'They won't take our rice, and yet they have a massive rice shortage,' Trump wrote on Truth Social. 'In other words, we'll just be sending them a letter, and we love having them as a trading partner for many years to come.'
His remarks came as Ryosei Akazawa, Japan's chief tariff negotiator, finished up his seventh round of talks in Washington and returned to Tokyo empty-handed. No concrete progress was made during a meeting and two phone calls with Commerce Secretary Howard Lutnick.
On Monday and the following day, Akazawa avoided directly responding to Trump's remarks and remained noncommittal about Japan's next move. He did avoid reiterating an earlier demand that the United States remove all new Trump tariffs as a precondition for an agreement, suggesting that Japan's position may have softened.
'Basically, I think we're at a stage where the negotiations aren't progressing at all, and the U.S. side is getting frustrated and making various comments — President Trump is saying things that sound like threats. But it also seems like Japan is acting on the premise that the negotiations aren't really going to move forward,' Sahashi said.
Akazawa talked in general terms about agriculture, saying it is the foundation of Japan as a nation, and repeated the government's stance that agriculture will not be sacrificed.
'I hold that conviction with a strength second to no one,' he said.
Under a 1995 'minimum access' framework , Japan imports about 770,000 tons of rice, half of which is imported from the U.S. Outside of that arrangement, imported rice is tariffed at ¥341 a kilogram.
Akazawa said that Japan is seeking a package deal that addresses both the sectoral and "reciprocal" tariffs.
'All I can say is that we are continuing to explore whether a potential agreement is possible,' he said.
The United States has set July 9 as the deadline for reaching trade deals, after which higher "reciprocal" tariffs might kick in. They would be 24% for Japan, up from the current 10%.
In Japan, campaigning for Upper House elections begins Thursday. The United States is entering a long holiday weekend, with Independence Day on July 4.
Akazawa said on Monday that working-level talks will continue, but the timing for his next visit to Washington remains undecided. He acknowledged that many of his trips so far were made before finalizing the meeting schedule with his U.S. counterparts.
Signals from the White House and comments by analysts suggest any relief from the sectoral tariffs — including 25% on auto and auto parts and 50% on steel and aluminum — is unlikely to happen. Analysts have said that the best-case scenario for Japan is that the 10% baseline tariff doesn't rise to 24% on July 9.
Effects of the heavy U.S. levies have already been reflected in Japan's economic data. Exports to the U.S. declined by 11% year on year in May, with automobile exports down 24.7%. In terms of volume, the decline was only 3.9%, indicating that Japanese automakers may have reduced vehicle prices to mitigate the tariff effects.