Tariff Negotiation Loses Momentum

Minister in charge of Economic Revitalization, Ryosei Akazawa, came back from the seventh meeting as the top negotiator on tariffs with the United States. Having discussed on the issue with U.S. Secretary of Commerce, Howard Lutnick, in Washington, D.C., Akazawa did not have a meeting with his counterpart, Secretary of Treasury Scott Bessent. President Donald Trump indicated a possibility of terminating the bilateral negotiation, if both sides fail in reaching a deal.

Akazawa stayed at the D.C. between June 26th and 30th this time. In the four-day visit, it was only Lutnick who had a meeting with Akazawa. “I will continue the discussion in a vigorous and sincere manner to achieve an agreement which will be beneficial for both Japan and the United States,” said Akazawa in his press conference in Tokyo after his trip to Washington.

 

Trump’s tariff on imported cars took effect in April. According to data of Japan Automobile Manufacturers Association, Japan exported 1.37 million cars to the U.S. in 2024, occupying 32 percent of all the exports to the world. After Trump introduced car tariffs, the export declined by 20 thousand from April 2025 to May 2025. Japanese carmakers anticipatehundreds of billions of decline in car exports to the U.S. in 2025.

 

Japan has been trying to push back tariffs on Japanese cars in the bilateral negotiations represented by Akazawa. The U.S. agreed with the United Kingdom in May that the tariffs on 100 thousand U.K. cars would be reduced to 10 percent. Japan has been requesting reduction of tariffs on Japanese cars, even if it could not be eliminated.

 

The deadline for the negotiation is set on July 9th. Trump is going to discuss with his trade team individual tariff rates for many countries. He complained about the situation of trade with Japan, especially on cars and rice. “I could send one (letter) to Japan: ‘Dear Mr. Japan, here’s the story. You’re going to pay a 25 percent tariff on your cars,” said Trump in an interview to Fox News. He also complained Japan’s rice import, which has allegedly been too few.

 

Akazawa has been insisting on protecting Japan’s national interest in the bilateral negotiation. Chief Cabinet Secretary, Yoshimasa Hayashi, ruled out sacrificing agriculture in the trade negotiation. Campaign for the Upper House election will officially start on July 3rd. It is very hard for Japanese Prime Minister Shigeru Ishiba to make any compromise in the tariff negotiation, as economic policy including consumption tax rate is going to be the greatest issue in the election.

 

It is highly unclear whether Japan and the U.S. can reach an agreement which is beneficial for both countries, as Akazawa reiterates to the press.

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