Ishiba vows Japan will stand its ground, demanding U.S. lift auto tariffs
Prime Minister Shigeru Ishiba stressed Sunday that Japan will continue to demand that the United States abolish auto tariffs.
Appearing in a TV program on Sunday, Ishiba said an agreement between Washington and London to set a 10% low-tariff quota for British vehicle exports to the U.S. is "one model," but said that Japan will stick to its stance of asking for complete removal of U.S. auto levies, arguing that Japan's trade and investment situations are different from those of the U.K.
The U.S,-U.K. deal "is one way (of reaching a deal), but the U.K.'s (U.S.-bound annual auto exports) are only about 100,000 units," Ishiba said. "We will persistently ask for abolition (of tariffs) ... (Japanese companies are) investing in the U.S. and creating jobs. If Japan's auto industry is battered, they won't be able to make investments in the U.S."
Ishiba also said that Japan will not sacrifice the agriculture sector for the sake of supporting the auto industry in the trade talks with the U.S.
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While admitting that expanding rice imports is an option, he said it should be done on the premise of reforming the rice policy's structure itself. The Japanese prime minister took a positive stance toward increasing corn imports.
While the 90-day suspension of the country-specific additions to the U.S. reciprocal tariffs is set to expire on July 9, Ishiba said this doesn't mean that Japan should make unreasonable compromises to reach an agreement before that date.
Japanese government officials find the U.S.-U.K. agreement alarming.
The U.S. agreed to lower its import levies on British vehicles to 10% from the current 27.5% for up to 100,000 units per year — roughly equivalent to Britain's total auto exports to the U.S. in 2024. Meanwhile, Japan's auto exports to the U.S. totaled 1.38 million units that year, according to the Finance Ministry's trade statistics.
"It's not appropriate to apply the same rules as Britain — which exports a smaller amount of vehicles — to Japan," a senior official at the Japanese industry ministry said.
A senior official at a Japanese government economic agency, meanwhile, was clear: "We don't want to rush to make Britain the model."
The U.S. is an important market for the Japanese automobile industry, accounting for about 20% of its total car exports in terms of volume and about 30% in terms of value.
On Thursday, Toyota said that its operating profit is estimated to decrease by ¥180 billion ($1.24 billion) in April and May alone due to the U.S. tariffs.
"Japanese companies are losing money day by day," said economic revitalization minister Ryosei Akazawa, the country's chief negotiator in the tariffs talks with the U.S.
Some Japanese government officials are calling for compromises. "It's one idea to create a low-tariff import quota rather than leaving high tariffs unchanged," said a senior official at another Japanese government economic agency.
But a Japanese government official said, "It will be difficult to secure an auto import quota acceptable to Japan," even if the two sides agree to discuss such a quota.
Ishiba remained cautious regarding calls from within the ruling Liberal Democratic Party for a consumption tax cut to support the domestic economy, saying, "What will happen to the nation's finances? I wonder if it is alright (to cut taxes altogether) for people in need and those who aren't. There must be another way to strongly support those who are truly in need."
Translated by The Japan Times
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