Japan signals intent for US tariff deal in June

TOKYO: Japan’s chief trade negotiator Ryosei Akazawa has indicated his aim to resolve tariff talks in time for a June meeting between US President Donald Trump and Japan’s Prime Minister Shigeru Ishiba following Trump’s surprise pivot to allow a partnership between two of the countries’ steelmakers.

“It’s been confirmed that the leaders of the two nations are looking forward to their meeting,” Akazawa told reporters in Washington last Friday after meeting US Secretary of Commerce Howard Lutnick and USTR Jamieson Greer.

“We will do our best with that in mind.” Akazawa’s remarks follow a phone call between Trump and Ishiba pledging to meet on the sidelines of Group of Seven summit next month.

Hours after that, Trump indicated his approval for a partnership between Nippon Steel Corp and United States Steel Corp, raising hopes that the president may be more willing to listen to Japan’s position.   

The US president said the partnership would create at least 70,000 jobs and add US$14bil to the US economy.

Leveraging the significance of Japan’s investment in the US economy is among the tactics Tokyo is likely using to win concessions from Washington on tariffs.

Japan had the largest stockpile of foreign direct investment in the United States in the five years to 2023, Commerce Department data shows.

Akazawa said the investment by Nippon Steel will help the US economy, though he declined to comment on the implications of a corporate deal for the trade talks or whether the deal is a buyout prior to an official announcement by the United States.

A separate Cabinet Office statement said that Akazawa had firmly requested that the United States reconsider its tariffs on Japan.

Akazawa said the talks centred on expanding trade, non-tariff measures and cooperation on economic security, and they had been franker and gone deeper than before. 

As with other nations, Trump has slapped Japan with a 25% levy on autos, steel and aluminium and a 10% across-the-board tariff. The so-called reciprocal tariff is set to be raised to 24% in early July, barring a deal.

Cars and auto parts comprise around a third of all exports to the United States from Japan.

The auto industry is a key driver of growth for Japan’s economy and employs around 8% of the workforce.

With an upper house election coming up this summer, reaching a trade deal could help boost Ishiba’s approval ratings, which have dropped to the lowest levels of his premiership.

Still, a deal that gives too much ground to the United States, especially in the farming sector, without addressing auto tariffs could also backfire.

For Akazawa, this was the third round of top-level trade talks with his US counterparts.

He is expected to revisit the US to meet Treasury Secretary Scott Bessent next week.

Speaking ahead of Friday meetings, Akazawa stressed the need to reach the deal as a package and warned against rushing to it.  — Bloomberg