Tariff Talks Rescheduled as Trump Rigid on Automobiles; Japan Officials Unable to Predict Timing of Agreement

Yomiuri Shimbun

4 hours ago

From the Prime Minister's Office website
Prime Minister Shigeru Ishiba, center right, and U.S. President Donald Trump, center left, talk at the Japan-U.S. summit meeting.
BANFF/CALGARY, Canada — Japan-U.S. negotiations to review Washington's tariff policy had to be rescheduled, despite Prime Minister Shigeru Ishiba's desire to break the deadlock with U.S. President Donald Trump through direct talks.
The summit on Monday between Ishiba and Trump made it clear that the automobile tariff — a key issue for Japan — is a non-negotiable matter for Trump, who has pledged to revive American manufacturing. This raises the possibility that reaching an agreement will take some time.
With a memo outlining his carefully prepared proposals in hand, Ishiba asked Trump to review the tariff measures, which would deal a harsh blow to Japan's automobile industry. Trump remained adamant, however, and rejected the requests.
'I sensed Mr. Trump's strong focus on the automobile industry,' a Japanese official present at the meeting recalled.
Ishiba was ready to accept a reduction in the tariff rate, instead of its complete elimination, but he was unable to change Trump's mind in the 30-minute meeting.
The prime minister told people around him after the summit: 'We were close to an agreement, but automobiles are a matter of national interest. We can't rush into an agreement that would damage the national interest.'
Concessions
Prior to the summit, the two sides wrangled over the automobile tariff during six rounds of ministerial-level negotiations, at which economic revitalization minister Ryosei Akazawa represented Japan. The Japanese side pressed for a review of a series of tariff measures, including 'reciprocal tariffs' and tariffs on steel and aluminum, but its top priority was automobiles.
U.S. Secretary of Treasury Scott Bessent and others have indicated that they would consider revising an additional 14% tariff planned for Japan as an extra reciprocal tariff surcharge, on the condition that direct investment in the United States be expanded.
The United States asserts that it would be difficult to give Japan special treatment, as additional automobile tariffs are imposed at a uniform rate of 25% on all countries. As a way out, Washington asked Tokyo to design a system for reducing the tariff on Japan that would make sense to other countries.
Japan then proposed that tariffs be cut based on how much a country contributes to the U.S. automotive industry. This idea was welcomed by U.S. Secretary of Commerce Howard Lutnick and others, and the two sides reached a compromise at the fourth ministerial-level negotiations on May 30.
Ishiba planned to visit the United States before the Group of Seven summit in Canada, aiming to reach an agreement with Trump. However, differences in understanding regarding the system that were revealed at the ministerial-level talks on June 6 caused Washington to harden its stance.
The gap remained unbridged in subsequent working-level negotiations, and opinion spread within the Japanese government that it would be difficult to reach an agreement at the summit.
Nevertheless, Ishiba went into Monday's meeting saying: 'We have achieved 90% of what we set out to do in the ministerial-level talks. Mr. Trump and I will work out the remaining 10%.'
Low motivation
The prime minister seems to have misjudged Trump's lack of enthusiasm for reaching an agreement.
The U.S. financial markets have calmed down compared to the immediate aftermath of the April announcement of the U.S. reciprocal tariff measures, and Trump had little motivation to rush to a conclusion. The fact that Lutnick, who is sympathetic to reviewing the automobile tariff, did not attend the meeting also worked to Japan's disadvantage.
Unable to take advantage of the G7 summit, Japan is struggling to predict when an agreement will be reached.
'The prime minister and Mr. Trump do not have a bad relationship. So, they should be able to find common ground if they negotiate persistently,' a senior Japanese government official said. 'But because the negotiations are being conducted with Mr. Trump, talks could either take a sudden turn or drag on for a long time.'