Ishiba Urges Focus on Lowering U.S. Auto Tariffs After Trade Deal

Japan’s Prime Minister Shigeru Ishiba is working to solidify national backing for a recently concluded U.S.-Japan trade agreement, acknowledging that while the deal was heralded as a “win-win,” its implementation will be more difficult than the negotiation process itself [1]. The agreement, finalized just before a key August 1 deadline, averted the U.S. threat of a 25% tariff on Japanese imports, settling instead on a 15% flat rate, a compromise that has eased immediate concerns but left key issues unresolved [2].

Despite the agreement being seen as a diplomatic success, questions persist over its legal and procedural foundations. Ryosei Akazawa, Japan’s chief trade negotiator, admitted that the deal relied largely on verbal understandings, similar to the U.S. agreements with the European Union and South Korea [3]. This lack of a formal written document has raised concerns among economists and legal experts that Japan could face challenges if the U.S. reverses its stance without a binding agreement. Opposition leader Yukiko Tanabe has called for greater clarity, warning that without a formal document, Japanese industries remain exposed to potential risks [4].

A major unresolved issue in the deal is the continued 27.5% tariff on Japanese automobiles. While the agreement did not alter this rate, it has created uncertainty for Japan’s auto sector, which accounts for nearly 10% of the country’s total output. Industry analysts warn that the unresolved tariff could lead to further job cuts, reduced capital investment, and lower production levels. Trade analyst Satoshi Yamada has argued that without the removal of these tariffs, the deal risks becoming one-sided rather than the “win-win” it was initially presented as [5].

In response, Ishiba has pledged to prioritize auto tariff relief in future negotiations, emphasizing that the success of the trade deal hinges on resolving this critical issue. At the same time, he faces growing political pressure from within Japan, as opposition parties criticize the lack of transparency in the negotiation process and the absence of a formal vote on the deal in the legislature. Ishiba has defended the urgency of the agreement, stating that premature formalization could jeopardize its terms [6].

As the U.S. and Japan move forward with post-deadline negotiations, Ishiba’s government is also focusing on strengthening Japan’s domestic industries to better withstand the pressures of open trade. With global economic conditions shifting in response to recent U.S. economic data, the successful execution of the trade deal remains a high-stakes priority for Japan’s leadership [7].

Source: [1] US-Japan trade deal: PM Ishiba hails 'win-win' agreement... (https://www.livemint.com/economy/usjapan-trade-deal-pm-ishiba-hails-win-win-agreement-warns-implementation-challenges-heres-what-he-said-1175****012362.html)

[2] Japan PM says win-win trade deal with US may be hard to... (https://www.businesstimes.com.sg/international/japan-pm-says-win-win-trade-deal-us-may-be-hard-implement)

[3] Opposition parties fume over U.S. trade deal not being put... (https://www.japantimes.co.jp/news/2025/08/04/japan/politics/budget-committee/)

[4] Japan PM Warns Trade Deal With US Is Tough To... (https://in.investing.com/news/stock-market-news/japan-pm-warns-trade-deal-with-us-is-tough-to-implement-urges-focus-on-lowering-auto-tariffs-4940948)

[5] U.S. Jobs Data Shock Raises Concerns: New Market Trend... (https://m.fastbull.com/news-detail/us-jobs-data-shock-raises-concerns-new-market-4338090_0)