Japan’s PM Quits as Trade Deals and Fractures Force a Leadership Crossroads

Japan’s Prime Minister Shigeru Ishiba has announced his resignation amid escalating political instability within his Liberal Democratic Party (LDP), marking the end of a brief tenure as leader of the world’s fourth-largest economy. In a press briefing on Sunday, Ishiba stated that the decision was made to prevent a potential party split and to allow for a transition of leadership after what he described as a "difficult decision to step down" [1]. The announcement came nearly a year after Ishiba’s election as LDP leader, a role that automatically makes him Japan’s prime minister. His resignation is expected to intensify political uncertainty in the country at a time of heightened economic and geopolitical challenges.

Ishiba acknowledged that the LDP had been divided by recent electoral setbacks, with the party losing its parliamentary majority in both chambers of Japan’s Diet for the first time since 2009 [2]. The loss of the upper house in July and a significant defeat in the snap election in October 2024 weakened the ruling coalition’s ability to pass key legislation, further eroding Ishiba’s political authority. The prime minister also highlighted the growing influence of right-wing populist movements, which have drawn support from voters frustrated with rising living costs and migration concerns [4].

A major factor in Ishiba’s decision was the resolution of tense trade negotiations with the United States. On Thursday, U.S. President Donald Trump signed an executive order implementing a trade deal that imposes a 15% baseline tariff on Japanese goods, including automobiles, reducing the rate from 27.5% on cars [3]. Ishiba described U.S. tariff measures as a "national crisis" and stated that the conclusion of the negotiations marked a "significant milestone," leading him to believe it was the appropriate moment to step aside [1]. However, negotiator Ryosei Akazawa noted on Sunday that the broader trade agreement remained "not settled," as the U.S. had yet to finalize tariff rates on pharmaceuticals and semiconductors [3].

The resignation announcement is expected to trigger an emergency leadership vote within the LDP, with Ishiba remaining in office until a successor is chosen. The leadership contest will likely focus on potential candidates such as Sanae Takaichi, the ultra-conservative former economic security minister, and Shinji Koizumi, the agriculture minister known for his appeal to younger voters [4]. With the LDP holding only a minority in both chambers of the Diet, the party faces the challenge of maintaining legislative control while managing internal divisions and public dissatisfaction. Ishiba’s approval rating had fallen to 32.7% as of Sunday, according to a Kyodo poll, reflecting the broader loss of public confidence in his administration [4].

The resignation adds to the challenges facing Japan’s economy, which is navigating the impact of U.S. tariffs and domestic economic strains. The prolonged negotiations with the U.S. underscored the complexity of balancing trade agreements with the protection of key industries, particularly the automotive sector. As Japan moves toward a new leadership transition, the country’s political landscape remains volatile, with rising right-wing populism and regional tensions shaping the path forward.

Source:

[1] Japan Prime Minister Ishiba Shigeru announces resignation (https://www.cnbc.com/2025/09/07/japan-prime-minister-ishiba-shigeru-announces-his-resignation.html)

[2] Prime Minister Shigeru Ishiba of Japan Says He Will Step ... (https://www.nytimes.com/2025/09/07/world/asia/japan-shigeru-ishiba-resign.html)

[3] Japan's PM Shigeru Ishiba resigns weeks after election ... (https://www.aljazeera.com/news/2025/9/7/japans-pm-shigeru-ishiba-will-resign-weeks-after-election-debacle-nhk)

[4] Japan PM Shigeru Ishiba to resign amid fallout from ... (https://www.theguardian.com/world/2025/sep/07/japan-pm-shigeru-ishiba-resign)