Japan Prime Minister Ishiba: Cannot accept United States tariffs including for cars

Japan Prime Minister Ishiba: Cannot accept United States tariffs including for cars

Japanese Prime Minister Shigeru Ishiba has reiterated his call to eliminate all tariffs in ongoing trade negotiations with the United States, emphasizing the mutual benefits of a zero-tariff agreement. In a recent televised interview, Ishiba underscored the positive progress in discussions and his constructive relationship with U.S. President Donald Trump [1].

Ishiba highlighted the recent U.S.-UK trade deal, which cut most tariffs on British car exports but left a 10% basic tariff in place, and argued that Japan should seek to eliminate tariffs. He noted that high import duties, particularly the 25% tariff on Japanese auto exports to the U.S., boost costs for American consumers and hurt the U.S. economy. Japan also faces a 24% retaliatory tariff on goods shipped to the U.S. [1].

The Japanese auto industry, a significant part of the Japanese economy, has been severely impacted by these tariffs. Japan’s chief trade negotiator, Ryosei Akazawa, cited the example of one auto company suffering $1 million in losses per hour due to the 25% U.S. tariff on automobile exports, underscoring the need for swift progress in negotiations [1].

While Ishiba seems more inclined to a zero-tariff plan, President Trump has suggested maintaining the floor 10% tariff. Trump insists on maintaining a base 10% tariff on Japan’s products, arguing that exemptions could be considered if trade partners offer substantial concessions [1].

Ishiba called for caution in the reduction of Japan’s consumption tax and warned against reducing it too quickly, as it may harm the country’s economy. He encouraged alternative measures to assist people in need instead of indiscriminate tax reduction [1].

Tokyo officials state that a deal is unlikely to be reached before Japan’s upper house of parliament election, casting a shadow over ongoing trade negotiations with Washington. Prime Minister Ishiba has clarified that Japan will not accept any trade deal that fails to address the Trump administration’s 25% tariffs imposed on Japanese car imports [2].

Japan’s unwavering demand for the elimination of US tariffs on its automobile exports is casting a shadow over ongoing trade negotiations with Washington, raising concerns about the potential derailment of a comprehensive trade agreement. Japan, the US’s largest foreign investor and closest ally in Asia, is eager to strengthen ties with Washington. However, Tokyo officials highlight that a deal is now unlikely to be reached before the late July elections for Japan’s upper house of parliament, which are already anticipated to be challenging for Ishiba’s already unpopular government [2].

Nicholas Smith, a Japan strategist at CLSA Securities, stated that Japan is now in a strong position. Shigeru Ishiba has his political career and that of his party to defend; he cannot just roll over. Smith added that cars comprised 81% of Japan’s trade surplus with the US in 2024. If he fails to win lower auto tariffs, PM Ishiba would be on a conveyor belt headed for revolving knives [2].

The extent of Japan’s influence in the White House was not known. Reliant on Washington for security, Tokyo had a goods trade surplus of over $60 billion with the US in the 2024-2025 fiscal year. Meanwhile, accusations from the Trump administration that Japan is intentionally undervaluing the yen have further complicated negotiations [2].

References:
[1] https://www.mitrade.com/au/insights/news/live-news/article-3-813655-20250512
[2] https://www.cryptopolitan.com/japans-stance-on-tariffs-could-stall-deal/