The Third Bilateral Talk on Tariffs

Japan’s top negotiator on tariffs, Ryosei Akazawa, had the third meeting with U.S. officials in Washington, D.C. on May 23rd. Reiterating Japan’s demand to reconsider President Donald Trump’s “reciprocal tariffs” on goods from Japan, Akazawa proposed a plan to reconstruct shipbuilding in the U.S. Having no clear vision of concluding a deal, focus of the tariff talks between Japan and the U.S. looks like dispersing. 

After Trump announced reciprocal tariffs on imports from foreign countries on April 2nd, Japan entered a bilateral negotiation over the tariff in advance of other countries in the world. In the first meeting at White House on April 16th, Akazawa requested Trump to rethink his tariff plan. Both governments agreed on seeking early deal. In the second meeting in D.C. on May 1st, they agreed on dealing with expansion of trade, non-tariff barriers and cooperation on economic security.

 

Both governments have not achieved any obvious progress in the negotiation for over a month. During the period, the U.S. reached a deal with the United Kingdom for reducing tariff on U.K. cars from 27.5 percent to 10 percent. The U.S. also reached an agreement with China to reduce ultra-high tariff rate on Chinese goods from 145 percent to 30 percent. China made tariff on U.S. goods smaller from 125 percent to 10 percent. The world became less interested in the negotiation between Japan and the U.S.

 

The U.S. Secretary of Tresury, Scott Bessent, the chief negotiator of the U.S., was absent in the third meeting. Akazawa again demanded U.S. Trade Representative, Jamieson Greer, and Secretary of Commerce, Howard Lutnick, to review Trump’s tariffs which impose 24 percent on Japanese products, including basic tariff of 10 percent.

 

In the telephone talk between Prime Minister Shigeru Ishiba and Trump before the third meeting, both leaders reconfirmed that they would have a meeting in Canada in June, taking opportunity of G7 summit. Although both governments hope to make a deal by the summit meeting, Akazawa ruled out any rough-and-ready deal that would erode national interest of Japan.

 

Instead, Akazawa reportedly proposed establishment of a fund for rebuilding business of shipbuilding in the U.S. Japan is supposed to support renewing shipyards or joint development of environment-friendly ships or icebreakers. Japan believes the projects will contribute to reconstructing U.S. shipbuilding. Ishiba also indicated that Japan can help the U.S. by repairing U.S. military vessels in Japan.

 

Construction of pipeline for liquefied natural gas in Alaska is another issue to talk. Ishiba agreed with trump on expanding import of LNG from Alaska at their meeting in February. Japan uses the issue as a bargaining chip in tariff negotiation, indicating possibility of investment on the project. The bilateral negotiation over tariff is developing to be a business talk over investment to attract Trump administration in need of political gains.

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