Trump floats 25% tariff for Japanese cars, says 'Mr Japan' unfair

Hindustan Times

5 hours ago

US President Donald Trump characterized trade in cars between the US and Japan as unfair and floated the idea of keeping 25% tariffs on autos in place, little more than a week before higher duties are set to kick in across the board if a deal isn't reached. The interview came right after another round of talks between Tokyo's top trade negotiator, Ryosei Akazawa, and Commerce Secretary Howard Lutnick.(AFP)
'So we give Japan no cars. They won't take our cars, right? And yet we take millions and millions of their cars into the United States. It's not fair,' Trump said during a Fox News interview that aired Sunday.
'Now, we have oil. They could take a lot of oil. They could take a lot of other things,' he said, referring to ways Japan might reduce the US trade deficit.
The comments show that the two sides still remain some distance from a deal and highlight the risk that Trump may stick with the 25% tariff on autos.
The interview came right after another round of talks between Tokyo's top trade negotiator, Ryosei Akazawa, and Commerce Secretary Howard Lutnick. Akazawa flew across the world to hold face-to-face talks in Washington, and while they initially met in person, two subsequent discussions took place on the phone.
Auto-related stocks on the Topix were down as much as 0.5% in Tokyo on Monday morning compared with a 1% gain in the overall index.
The duty on the car sector has emerged as one of the key sticking points in the talks as Washington focuses on its large deficit in the sector while Tokyo tries to protect a key pillar of its economy.
Akazawa has repeatedly said that the US's 25% tariffs on cars are unacceptable, saying that Japan's car industry has made an enormous contribution to the US economy through the investment of more than $60 billion and the creation of 2.3 million local jobs.
Japan's point man on tariffs arrived late last week in Washington for the seventh round of talks and then extended his stay in hopes of hashing out a deal as the July 9 deadline for higher 'reciprocal' tariffs looms. Japan has insisted on keeping the sectoral tariffs on cars and other items included in the talks on the wider 'reciprocal' levies.
Akazawa said he will keep the deadline in mind but won't fixate on it as Tokyo aims to settle all trade disputes with a package that addresses the sectoral tariffs, too.
Statements released by the Japanese government over the weekend said Akazawa and Lutnick had 'fruitful' discussions and agreed to continue seeking a deal that is beneficial for both the US and Japan. The statements, which covered one in-person meeting and two phone calls with Lutnick while Akazawa was in Washington, did not touch on what was discussed or what progress if any was made.
The 25% US tariff is already in place on cars and auto parts, along with a 50% duty on steel and aluminum. The separate across-the-board tariffs, now at 10%, will jump to 24% if no deal is reached in time. Without a breakthrough in the negotiations, Japan's economy could be pushed into a technical recession after it shrank in the first quarter.
Trump's statements in the interview gave no impression that Japan was any closer to reaching a deal or winning an extended reprieve on the reciprocal tariffs. Instead, Trump flagged that the US can set its trade terms with Japan unilaterally.
'I'm going to send letters,' Trump said in the interview, referring to a plan to inform some trading partners that the US will unilaterally set tariffs. 'I could send one to Japan. 'Dear Mr. Japan, here's the story. You're going to pay a 25% tariff on your cars.''