Japan regrets Trump’s tariff, aims for deal by new Aug 1 deadline

TOKYO – Japan on July 8 aired its regret over US President Donald Trump’s decision to impose a 25 per cent tariff on the longtime Asian ally, but its chief negotiator pledged to ramp up bilateral negotiations to reach a mutually beneficial “package” deal by the extended deadline of Aug 1.

After Mr Trump’s intention was conveyed to Japan in a letter, Japan’s top negotiator Ryosei Akazawa spoke by phone with US Commerce Secretary Howard Lutnick and expressed his country’s disappointment. The two negotiators had candid and in-depth discussions for over 40 minutes, Mr Akazawa said.

Prime Minister Shigeru Ishiba, who described the latest US move as “truly regrettable,” said Japan will not waiver in its defense of national interests in future rounds of talks, pledging to do all it can to mitigate the impact of the imminent tariff hike on the export-oriented Japanese economy.

“We will continue to engage in negotiations with the United States to explore the possibility of reaching a mutually beneficial deal while protecting our national interests,” Mr Ishiba told a government task force on US tariffs.

Both Mr Ishiba and his close aide Mr Akazawa maintained that the recent rounds of negotiations had prevented an even higher tariff, as Mr Trump previously hinted at rates of 30 per cent or 35 per cent.

The US president’s move came shortly before a three-month pause on part of the “reciprocal tariff” was due to end on July 9.

The newly set rate of 25 per cent, slightly higher than 24 per cent initially announced for Japan, is set to take effect on Aug 1, with Mr Trump leaving the door open for a revision through negotiations.

“As a negotiator, I will devote myself to compiling a full package that can be sent to both countries’ leaders by utilizing the roughly three extra weeks that I’ve got to the fullest,” Mr Akazawa told reporters after his phone call with Mr Lutnick.

“I believe we have built mutual confidence to a certain degree and know that both nations have been negotiating sincerely and faithfully,” he said.

Bilateral tariff talks, including a face-to-face summit, have not resulted in substantive progress.

Both nations are believed to remain apart over autos, given the impact on both economies. Mr Akazawa said on July 8 there will be no package deal without an agreement on the auto sector.

While Mr Trump has turned to tariffs to fix what he sees as imbalanced trade, a 25 per cent levy on imported cars has been seen as especially detrimental to Japan, which relies heavily on the likes of Toyota Motor and Honda Motor.

“Unfortunately, we have yet to reach an agreement as there are differences between us. Japan has been avoiding making easy concessions while demanding and protecting what is needed,” Mr Ishiba said.

Ahead of the July 20 House of Councillors election, he said that the negotiations, mostly conducted by his Mr Akazawa, have helped to keep the US tariff rate for Japan “effectively on hold”.

Media polls show his ruling coalition faces an uphill battle to retain majority control of the upper chamber of parliament.

Mr Trump wrote to Mr Ishiba: “Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” according to his post on his Truth Social platform, with the president sending a similar letter to South Korea, another US ally.

“These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” Mr Trump said.

The United States is a major trading partner for Japan, which posted a trade surplus of roughly 8.6 trillion yen (S$76 billion) with the world’s largest economy in 2024. Automobiles accounted for more than a quarter of Japan’s total exports to the United States by value, according to government data.

Tokyo has been urging Washington to focus on what the longtime allies can achieve together through investment, rather than relying on tariffs to address the US trade deficit with Japan.

In addition to automobiles, rice has recently become a target of Mr Trump’s criticism. He claims that Japan is not importing US rice – an assertion Mr Ishiba has rejected.

“It is unacceptable,” ruling Liberal Democratic Party policy chief Itsunori Onodera said at a party meeting to discuss the US tariffs. “It is extremely rude to send only a letter to an allied nation. I strongly resent it.”

US Treasury Secretary Scott Bessent, the point man for the tariff negotiations, has signaled a trade deal with Japan is unlikely to be sealed any time soon, citing complications surrounding the upper house election. KYODO NEWS