Japan stuck at starting line in tariff talks with U.S. as U.K. inks deals

Japan Times

09-05-2025

The agreement between the United States and the United Kingdom on tariffs means little for Japan's ongoing efforts to get its own trade deal, with analysts and officials pointing out that some countries have much more work to do than others when it comes to meeting the demands of the administration of U.S. President Donald Trump.
'First of all, the U.K. is a trade deficit country with respect to the United States, so their positions are completely different,' said Takahide Kiuchi, chief economist at Nomura Research Institute. 'In other words, the threshold for an agreement was quite low from the start.'
Trump announced the agreement with the U.K. in the Oval Office on Thursday. It was the first deal made since the U.S. entered negotiations with dozens of countries on tariffs already imposed and on higher rates set to come into effect in July.
In the agreement with the U.K., the 10% baseline tariffs on British goods remains in place.
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A 10% tariff will be charged on up to 100,000 British cars annually — a qualified retreat from the 25% auto tariffs currently in place. The agreement also includes duty cuts on a number of products, including steel and jet engines.
The U.S. quickly warned, however, that comparing Japan with the U.K. was apples and oranges, and that getting over the line with many countries will be a slow and arduous process.
'Obviously, when you talk about Japan — I mean, come on, you've got to spend an enormous amount of time with Japan, Korea,' U.S. Commerce Secretary Howard Lutnick said in an interview with Bloomberg following the announcement on Thursday. 'These are not going to be fast deals.'
The U.S. president gave a straight 'no' when asked if the remaining 10% baseline tariff will be the template for future trade deals, saying that the U.K. received special treatment and that rates could be much higher for other countries.
'Some will be much higher because they have massive trade surpluses. In many cases, they didn't treat us well,' Trump said, adding that 10% is probably the lowest rate that will be agreed to.
Kiuchi said that while the U.S. was willing to give a lot in negotiations with the U.K., it had to hold the line on the 10% rate so that other nations did not get the idea that they can take aim at the baseline.
"It would undermine the overall tariff framework, so the U.S. couldn't make such a concession,' he said.
Trump also made it clear on Thursday that he won't offer a similar quota system on automobiles in future deals.
'I won't do that deal with cars — I mean, unless somebody shows me that there's another kind of a car that's comparable to a Rolls-Royce," he said.
According to the Japan Automobile Manufacturers Association, Japan exported nearly 1.4 million vehicles to the U.S. in 2024. The U.K. exported less than one tenth of that number, at 102,000, according to the U.K.'s Society of Motor Manufacturers and Traders.
Trump imposed 'reciprocal" tariffs as high as 50% in April on dozens of countries, including Japan, with a baseline tariff of 10% on nearly all imports flowing into the U.S. The U.K. was only subject to the 10% baseline tariff.
The U.S. ran an $11.9 billion trade surplus in goods with the U.K. in 2024, according to the Office of the U.S. Trade Representative.
Ryosei Akazawa, Japan's top tariff negotiator — who just returned from his second round of tariff talks in Washington last week — declined to comment on the remarks by Lutnick and Trump, saying there has been 'no change whatsoever' in Japan's position in continuing to call for a review of the tariffs the U.S. has imposed on it.
'Since the negotiations are still ongoing, I feel that commenting too much at this stage may not have much impact on the outcome,' he said at a Friday news conference in Tokyo.
'That said, each country is in a different position and faces different circumstances. Therefore, I understand that it is only natural for the schedule of talks with the U.S., the content of agreements, and their timing to vary from country to country.'
According to news reports that emerged after his meeting last week, U.S. officials presented a proposal to the Japanese delegation that only focuses on potentially lowering the reciprocal tariffs, while showing reluctance to lower tariffs on autos, auto parts, steel and aluminum.
'The Trump administration's position is that it is negotiating how to deal with those additional tariffs. This applies not only to Japan, but also to the EU, India and other countries. Japan, however, wants to go beyond that — to review all tariffs, including those on automobiles and steel,' Kiuchi said.
'The two sides haven't even agreed on the subject of negotiation at this point,' he said.