Japan Urges Swift U.S. Tariff Cuts to Avoid Trade Deal Delays

Japan has intensified its call for the United States to swiftly implement tariff cuts on automobiles and auto parts, as progress on the $500 billion bilateral trade agreement appears to be lagging. Akimasa Akazawa, the Minister of State for Economic Revitalization and Japan’s lead trade negotiator, emphasized the urgency of moving forward, stating that delays could undermine the momentum of the negotiations. He urged U.S. President Donald Trump to act immediately through an executive order rather than waiting for a formal, written agreement that could become ambiguous or delayed by bureaucratic processes [1].

Akazawa highlighted that Japan and the U.S. had already reached an agreement to cut auto import tariffs from 25% to 15%. He credited Trump for his deal-making abilities and noted that the reduction was scheduled to take effect on August 1. The minister expressed concern that the U.S. might require a written agreement before acting, which he warned could lead to misinterpretation and further delays [2].

The trade deal also includes a $500 billion investment plan, with funding channeled through state-affiliated institutions such as NEXI and the Japan Bank for International Cooperation (JBIC). Akazawa clarified that the funds would be structured as loans, investments, and loan guarantees, and he dismissed criticisms of the agreement as “selling out Japan,” noting that only 1-2% would be direct investment while the rest would involve loans with interest returns. He also estimated that Japan could save up to $68 billion if the deal proceeds as planned [1].

Despite Prime Minister Shigeru Ishiba’s support for a written agreement—advocated by him and several party leaders during a July 25 meeting—Akazawa warned of the risks involved. He argued that the U.S. insistence on a formalized document could complicate the terms and open the door for misinterpretation. Japan, he said, had already lowered its initial tariff rates by 10 percentage points to prevent potential losses and avoid a scenario where U.S. companies retained a disproportionate share of trade profits [2].

The minister also noted that the deal was not exclusive to the U.S. and Japan, as other countries were reportedly reviewing similar trade arrangements. However, he admitted that the details of how the investment plan would be implemented remained unclear, and there was no definitive timeline for when the new tariff structure or the investment program would take effect [1].

The Trump administration had previously positioned the U.S.-Japan deal as a potential model for future trade agreements, but the lack of a signed document has left room for ongoing negotiations. Akazawa expressed concern over recent U.S. statements suggesting that tariff cuts would only occur once a formal agreement is finalized. He reiterated that Japan expected 15% tariffs to be in place by August 1 and emphasized that the deal aligned with the national interests of both countries [2].

The uncertainty surrounding the tariff reductions has raised concerns within Japan’s automotive sector, a key pillar of its trade relationship with the U.S. Analysts have warned that prolonged delays could deter investment and disrupt long-term planning for Japanese firms exporting to the U.S. market [1].

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[1]title1.............................(https://www.mitrade.com/au/insights/news/live-news/article-3-1002729-20250801)

[2]title2.............................(https://www.mitrade.com/insights/news/live-news/article-8-1002726-20250801)