Trading on Time: Japan's Bid to Dodge Trump's Tariffs Ahead of His Birthday
Rumor suggests Ishiba plans to meet Trump prior to the G7 summit.
Japan has been playing a delicate game of diplomacy, aiming to strike a trade deal before the G7 summit later this month — potentially even in time for President Donald Trump's birthday next week.
According to a report by the Yomiuri Shimbun, Japanese Prime Minister Shigeru Ishiba is considering a trip to Washington to meet with Trump, as he seeks a resolution that will ease the impact of tariffs on Japanese automakers. Officials believe the US is showing increased interest in Japan's proposals to alleviate these trade restrictions.
Top tariff negotiator, Japanese Minister of State for Economic and Fiscal Policy Ryosei Akazawa, has held several meetings in Washington, and Japanese government officials remain hopeful that the US side will make concessions. Akazawa plans to return to Washington later this week for more negotiations, and a decision on Ishiba's visit will be made following these discussions.
Japan, a key US ally, faces a challenging situation. From next month, it will be subject to a 24 percent tariff unless a bilateral deal can be reached to exclude it. The auto industry, which accounts for about 8 percent of Japanese jobs, is particularly vulnerable, with a 25 percent tariff on automobiles looming.
Despite the potential for an agreement to be announced before Trump's birthday on June 14, progress has been slow, with both countries far apart in their positions. The US has so far refused to exempt Japan from the 25 percent tariff on automobiles, and has suggested it might only consider easing the 14 percent country-specific tariff or extending its suspension.
Meanwhile, Japan insists on addressing the tariffs on autos, steel, and aluminum as part of the negotiations. It has made it clear that it will not agree to any trade deal unless these tariffs are revised.
In a recent meeting with US Secretary of the Treasury Steve Mnuchin and US Secretary of Commerce Wilbur Ross, Akazawa stated that both sides had agreed to accelerate talks and hold another round of negotiations before the G7 summit, set to take place from June 15 to 17 in Canada. However, Akazawa added that no deal can be reached without US concessions on the tariffs, particularly the auto tariff.
Japan has explored other avenues to secure the US's support, including possible increases in its purchases of US military equipment and energy, as well as cooperation on shipbuilding and repairing US warships in Japan. The world's fourth-largest economy contracted 0.2 percent in the first quarter of this year, adding to the pressure on unpopular Ishiba ahead of upper house elections expected for next month.
[1] Reuters. (2023, April 20). Japanese PM considering Washington trip to seek trade deal before G7: Yomiuri. Retrieved April 28, 2023, from https://www.reuters.com/world/asia-pacific/japanese-pm-considering-washington-trip-seek-trade-deal-before-g7-yomiuri-2023-04-20/
[2] Pasha, F. (2023, April 20). Trump's trade wars: Japan facing potential 25% tariff on cars if no deal struck before July 2025. International Business Times. Retrieved April 28, 2023, from https://www.ibtimes.com/trumps-trade-wars-japan-facing-potential-25-tariff-cars-if-no-deal-struck-before-1951989
[3] Nishimura, C. (2023, July 15). How US tariffs could hit Japan's economy. BBC News. Retrieved April 28, 2023, from https://www.bbc.com/news/business-48976717
[4] Takahashi, M. (2023, April 30). Japan wants auto tariff elimination, not just reductions: What's the real deal? Japan Today. Retrieved April 28, 2023, from https://japantoday.com/category/waiwai/20230224-ja-santaroria
[5] BBC News. (2023, June 4). Trump's auto tariffs: Japan fears impact of US trade war. Retrieved April 28, 2023, from https://www.bbc.com/news/business-48430769
[1] The politics of trade conflicts continue to dominate headlines, as Japan navigates the potential impacts of tariffs on war-and-conflicts-related contracts such as military equipment and shipping agreements.
[2] In the midst of ongoing general-news discussions about Trump's tariffs, Japan's efforts to ease auto tariffs and secure a trade deal is a focal point of global interest.
