Trump Threatens 25% Tariffs on Japanese Cars Over Trade Imbalance

US President Donald Trump has reignited tensions with Japan by criticizing their automobile trade practices, labeling them as “unfair” just days before steep new tariffs could be enforced. In a recent interview, Trump asserted that the trade relationship heavily favors Japan, resulting in a bad deal for the United States. He highlighted the imbalance, stating that while the US imports millions of Japanese cars, Japan does not reciprocate by importing American vehicles. Trump emphasized that both countries recognize the trade imbalance and that Japanese officials have acknowledged the problem and the significant trade deficit the US has with Japan. He suggested that Japan could address this issue by increasing its purchases of American vehicles, oil, and other goods.

The US has long complained that Japan’s safety and emissions standards act as non-tariff barriers to American cars. Japanese automakers have thrived in the American market, but US carmakers have struggled to penetrate the Japanese market. This ongoing issue has been a point of contention in US-Japan trade relations for decades.

As the July 9 deadline approaches, tensions are mounting. Under the existing agreement, if the Doha talks do not progress, the US could impose 25% tariffs on Japanese car imports. Japan’s chief negotiator, Ryosei Akazawa, extended his stay in Washington DC for follow-up talks with US Commerce Secretary Howard Lutnick to prevent a trade rupture. The two have engaged in several discussions over the past months to address long-standing trade issues. The Japanese government described the recent talks as productive, with both sides agreeing to continue seeking a mutually beneficial deal. However, behind-the-scenes reports indicate that the talks are stalled on core issues, such as measuring market access for American cars and how Japan could offset the deficit to meet US demands.

Despite the positive tone of the joint statement, there is no sign of a formal agreement or reprieve from the tariffs. Analysts warn that a failure to reach a deal could lead to retaliation and damage bilateral trade relations. Trump’s comments also signal a growing willingness to act unilaterally. He warned that the US could impose tariffs without further discussion or approval from Japan. Trump plans to send letters to trading partners, including Japan, outlining new tariff measures. He stated that Japan could be required to pay a 25% tariff on its car exports to the United States. This aggressive stance is part of Trump’s “America First” trade policies, aimed at reducing US trade deficits through tariff measures. While this approach has brought countries to the negotiating table in the past, it also risks unsettling global trade.