Leaders Fails in Having a Deal

Prime Minister Shigeru Ishiba had a meeting with U.S. President Donald Trump in the backdrop of G7 summit meeting held in Kananskis, Canada on June 16th. Although both leaders hoped to reach an agreement on tariffs at the meeting, they differed with some points including tariffs on cars. It is likely that both governments are entering into a long negotiation over gaining as much interest of their own as possible. 

After the meeting, Ishiba explained that he could not reach a deal on the package of tariff issue. “Seeking an agreement that would meet Japan’s national interest, I had a frank discussion with President Trump,” said Ishiba to the press. He declined to indicate when those two governments would have an agreement, raising a reason that it would be a negotiation with a counterpart.

 

Ishiba did not tell the details about the meeting with Trump. On what point they disagreed, on extension of moratorium of “reciprocal tariffs,” and on his perspective of the negotiation, Ishiba reiterated “I can’t say that,” to the reporters. However, he indicated significance of agreement on cars, referring to importance of car trade for Japan in terms of national interest. As Japan’s top negotiator, Ryosei Akazawa, had been stressing in the negotiation with the U.S. officials, Ishiba insisted on  protecting national interest of Japan.

 

It was reported that Japan and U.S. were close to a deal on cars, in which the U.S. would accept reduction of tariffs on Japanese cars from 25 percent to 10 percent. However, the U.S. side changed its stance on car tariffs just before the leaders’ meeting in Canada. Although Ishiba tried to pave the way to an agreement in a telephone conversation with Trump three days before the summit meeting, the both leaders could not have a good view for a conclusion.

 

The U.S. has reached an agreement with the United Kingdom to reduce tariff on cars from 25 percent to 10, which was limited to 100 thousand cars a year. Trump signed the deal with U.K. Prime Minister Keir Starmer on the same day of U.S.-Japan summit. ”He’s liberal, which is a bit different from me, but I think he’s a very good person and I think he’s done a very good job thus far,” said Trump about Starmer.

 

Japan has accumulated minister-level meetings with U.S. Trump administration, expecting some “special” treatments for Japan as a close ally in Asia-Pacific region. However, Trump administration did not show any preference for Japan. Japan realized that it is one of the counterparts in tariff negotiation, when U.S. embarked on direct negotiation with China, in which U.S. sought a deal on critical minerals.

 

Ishiba is hoping to conclude the negotiation with Trump before the Upper House election in July. Not only the deal is not foreseeable, but reciprocal tariffs will be activated in July 9th. The manufacturers will possibly be affected by the delay of Japan-U.S. negotiation. Ishiba is facing difficulty in building up his campaign strategy.

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