Beeman: Japan should Address Tariff Issues with China in Mind

Yomiuri Shimbun

06-05-2025

The Yomiuri Shimbun
Michael Beeman speaks during an interview with The Yomiuri Shimbun in Washington on May 2.
WASHINGTON — Former U.S. Assistant Trade Representative Michael Beeman said in an interview with The Yomiuri Shimbun that Japan should keep in mind when negotiating tariff policy with the United States that the U.S. side is seeking cooperation to prevent China from evading tariffs by sending exports to the United States through a third country.
The following excerpts from the interview have been edited for flow and clarity.
The Yomiuri Shimbun: What is the objective of the administration of U.S. President Donald Trump in pushing ahead with tariff hikes?
Michael Beeman: The president's been very clear that he does not like trade deficits, including with individual countries. He's been very clear about his objective of trying to force a reshoring of manufacturing back in the United States. He also has talked about tariff revenue as a replacement for income tax revenue, so it is a mix of objectives, but all to justify a new resetting of terms of trade with the world. So, I don't see tariffs today going back to where they were at the end of last year. I think some will moderate, but some will not go away.
Yomiuri: What are the key points in the Japan-U.S. tariff negotiation, from your perspective?
Beeman: I think the U.S., obviously, will be seeking from Japan a number of steps that will make a fundamental change in the trade deficit numbers. So, this means issues like tariffs in Japan. It means issues like nontariff barriers in Japan. It could mean issues like currency as well. It also means, I think, an expectation that Japan will find other ways to lower its trade surplus with the United States. For Japan, I think the goal is to try and go back to the situation late last year, basically to be exempted from all of these tariffs based on some kind of negotiated outcome. And I think that is a huge obstacle for them to succeed, because I think there is a major gap in view on each side of what they hope to achieve.
Yomiuri: It has been reported the United States was quite negative about reviewing tariffs. How should Japan respond?
Beeman: I think [there is] deep disagreement over whether tariffs would be completely removed on Japan, or if they would just be moderated and decreased but not removed. I think the reality is that the automobile and auto parts trade is a major driver of the trade deficit with Japan, so I think that sector is going to remain a real challenge in these negotiations.
Yomiuri: Regarding currency, the president has indicated that he wants to call in the high dollar. How do you think discussions on the exchange rate will progress in Japan-U.S. negotiations?
Beeman: Japan is always very eager to have any discussion on currency as a separate discussion. I think in the president's mind, these are all very much linked, and they're linked in terms of the impact on the trade deficit and the undervalued yen.
I do think currency will be a topic for discussion in any U.S. and Japan package outcome. It could take on the form of some kind of agreement not to change the rate exactly, but, maybe instead on transparency measures by the central banks on how they and how the government reports about the interventions and in currency markets and the rest.
There's one model for that, and that model is in the agreement of the renegotiated NAFTA (North American Free Trade Agreement) agreement. So, the USMCA (United States-Mexico-Canada Agreement) has a currency chapter, and that focuses on transparency, primarily, and some penalties if parties are not transparent about what's happening. So, I think something like that could come out of this negotiation to add pressure on the Japanese government to stop talking about the yen.
Yomiuri: Trump has imposed extremely high additional tariffs on China. What is his intention?
Beeman: I always predicted that China would get more than everybody else, because I think the administration, and this was true in the first Trump administration, really does see China as a huge part of the problem, and so I think there is a goal to essentially decouple the U.S. from dependence on imports from China for many key products.
I think tariffs will continue to be higher on China, but probably not that high, but in key sectors, I'm talking about steel, autos, machinery, those sectors, I think they will continue to be even higher.
And I've emphasized this quite a bit for a while, [a] priority that both the Trump and then the Biden administration, and now the Trump administration, again, has is, with tariffs so high on China, Chinese companies are looking for ways to get their product into the United States through a third country.
They put a new label on it, made in Cambodia, whatever, and then ship it to the U.S. as a made in Cambodia product to avoid the tariff. That's one way. The other way is Chinese companies investing in other countries, making things there and then exporting them to avoid the higher tariff on China. With that as background, I think that there is a role for Japan to play to help make sure that the door is shut to those kinds of exports through Japan, basically. And I think the administration is looking for that kind of cooperation from Japan and from many other countries as well. So that's one example of how Japan can be proactive to address that concern.
Yomiuri: Obviously, the United States has broken some trade or tariffs agreements. How can Japan receive assurances that new trade agreements will be kept intact?
Beeman: I get this question all the time, and there's no really good answer, I think. Honestly, what the Trump administration wants is not just an agreement on terms, it wants an agreement on results and outcomes. So that's a very different kind of exercise than agreement on principles and rules and conditions and obligations, to balance those. So, what may seem to be in balance in a traditional trade agreement may be out of balance when it comes to actual trade. We've seen this. So, so long as the administration continues to focus on results of trade, I think they're going to have this continuing feeling of wanting to be able to adjust things later, if the tariffs aren't working as anticipated, for example.
Will they get any deals if they continue to have that mindset? I don't know. It may be very difficult to negotiate that kind of outcome without clear assurances that this is it, right? This is the deal. You're not going to come back for more later, but that's really in the eye of the president, and, you know, he's prone to changing his mind and seeing things differently. So, that's a real challenge for all countries, including Japan.
Yomiuri: Do you have a sense of what is achievable through these negotiations?
Beeman: What I've been saying for many months [is] that the president is looking for what used to be called a protective tariff 100 years ago, and so that means he's going to raise tariffs and going to lock that in, and then he's going to negotiate other stuff up and down depending on that. Return to zero tariffs, for now, I just don't see that as happening. Over time, if public reaction becomes so bad to the tariffs, and it's already quickly worsening day by day, the support for these tariffs is quickly declining among Americans. So, if you get that over time, you get Congress having a midterm election and people thrown out because they supported the tariffs. So, you can see how this could change over time. But for now, I think what they intend to do is to lock in the 10% and then have other stuff above that.
— This interview was conducted by Yomiuri Shimbun Staff Writers Hiroyuki Tanaka and William Corcoran.
Michael Beeman
Beeman earned a Ph.D. in political science from the University of Oxford in 1998. After working at the U.S. Department of Commerce until 2004, he served as assistant U.S. trade representative for Japan, South Korea and the Asia-Pacific Economic Cooperation from 2017 to 2023.