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Japan Rejects US Trade Deal Without Auto Tariff Removal

Word on the StreetMonday, May 12, 2025 1:08 am ET

1min read

Japanese Prime Minister Fumio Kishida has firmly stated that Japan will not accept any preliminary trade agreement with the United States that does not include automobile tariffs. This declaration was made during a parliamentary session on Monday, where he was questioned about the possibility of the U.S. pressuring Japan to reach a deal that excludes automobile tariffs.

Kishida emphasized that Japan is seeking the removal of all additional automobile tariffs imposed by the U.S. and is committed to negotiating the elimination of all tariffs. He also expressed that there is no urgency to reach an agreement with the U.S. This stance comes as the negotiations between the two countries have been progressing slowly.

Japan's chief trade negotiator, Takeo Akiba, also reiterated the country's firm position, stating that Japan will continue to seek the removal of all tariff measures imposed by the U.S. This trade dispute is intensifying as the June negotiation window approaches.

Akiba had previously stated that he aims to reach a preliminary agreement by June. However, recent reports suggest that the deadline for the agreement could be as early as the beginning of July, just before Japan's general election.

Japan has proposed several measures to reach a compromise, including increasing investment in the U.S. automotive industry and strengthening cooperation in shipbuilding. This demonstrates Japan's proactive approach to finding a solution while also highlighting the sensitivity of the automotive sector to Japan's economy. Some analysts suggest that Japan's economy may have already begun to contract in the first quarter, even before the 25% automobile tariff took effect.

With the U.S. concluding its first formal negotiations with China and reaching an initial agreement with the U.K., the progress of the U.S.-Japan trade talks has garnered significant attention. Kishida reiterated on Monday that Japan will not sacrifice its agricultural market to protect its automotive industry.

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