Japan seeks to minimise impact of new US tariffs, officials say
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Tokyo has requested that its treatment be as favourable as an agreement reached by the two sides in 2025.
PHOTO: REUTERS
TOKYO – Japan could be subject to higher tariffs if the US moves forward with a new regime of import duties, but Tokyo has requested that its treatment be as favourable as an agreement reached by the two sides in 2025, Japanese officials said on Feb 24.
Multiple Japanese government officials said Tokyo does not intend to renegotiate its trade deal with Washington ahead of Japanese Prime Minister Sanae Takaichi’s visit to the US in March.
US President Donald Trump, following the US Supreme Court’s decision on Feb 20 to strike down his tariffs under the International Emergency Economic Powers Act (IEEPA), intends to apply a 15 per cent duty on imports from all countries, the maximum allowed under a law that is separate from the one the Supreme Court examined.
Japanese Trade Minister Ryosei Akazawa said Tokyo requested treatment that is equally favourable to the trade deal that was agreed upon in 2025, following Mr Trump’s weekend announcement.
Mr Akazawa also said some Japanese exports, which are currently subject to reduced tariffs under the deal, may face higher tariffs.
Mr Trump warned countries that if they back away from their trade deals with the US, he will hit them with higher duties under different trade laws.
Mr Akazawa reaffirmed the implementation of July’s trade deal “in good faith and without delay” in a call on Feb 23 with US Secretary of Commerce Howard Lutnick, the Trade Ministry said.
Asked about the Supreme Court decision, Mr Akazawa and other officials said they would closely examine its details.
In July, the US and Japan agreed on a trade deal that cut tariffs on autos and other goods to 15 per cent, while Japan agreed to a US$550 billion (S$697 billion) package of US-bound loans and investment.
Japan financing US projects
If the US does not implement permanent tariffs to replace the IEEPA-based levies, that would boost Japan’s real gross domestic product by 0.375 per cent annually, according to an estimate by Nomura Research Institute economist Takahide Kiuchi.
The two countries last week unveiled the first three US projects – valued at US$36 billion – to be financed by Japan, including an oil export facility, an industrial diamonds plant and a gas power plant.
“It is not that Japan was forced into a loss-making agreement,” Mr Akazawa said, adding that the tariffs-and-investment agreement is a “win-win deal”. He said he has no plans to visit the US for more trade talks.
Government sources familiar with the matter said Tokyo will not seek to review the agreement for fear of provoking Mr Trump into applying harsher sector-specific, non-IEEPA-related tariffs, particularly on Japan’s car industry, and to maintain stable relations with Washington ahead of Ms Takaichi’s visit. REUTERS
