Japan and the US have made progress in their trade talks aimed at easing US President Donald Trump’s tariffs, but the two sides have not yet reached an agreement. According to Ryosei Akazawa, Tokyo’s trade envoy, “we further made progress towards an agreement” during the fifth round of talks, but “we’ve not been able to find a point of agreement yet”. Akazawa expressed hope that a deal could be sealed “as soon as possible”.
The trade talks are crucial for Japan, which is subject to a 10% baseline tariff imposed by the US, as well as steeper levies on cars, steel, and aluminum. The US has also imposed an additional 24% “reciprocal” tariff on Japan, which was later paused until early July. Japan is pushing for all levies announced by Trump to be lifted. The 25% auto tariffs imposed by Washington are particularly concerning for Tokyo, as roughly 8% of all Japanese jobs are tied to the sector.
Akazawa’s comments come ahead of a potential meeting between Japanese Prime Minister Shigeru Ishiba and Trump on the sidelines of the Group of Seven (G7) summit in Canada, which starts on June 15. Japan’s economy, the world’s fourth-largest, contracted 0.2% in the first quarter of 2025, adding pressure on Ishiba ahead of upper house elections expected in July. The ongoing trade talks have been closely watched, with many countries awaiting the outcome.
The tariffs are causing significant losses to Japan’s economy, with Akazawa stating that they are “causing daily losses to Japan’s economy”. Japan’s position remains unchanged, with the tariffs being unacceptable. In a bid to reach an agreement, Japan is proposing a mechanism to reduce the auto tariff rate based on contributions to the US auto industry.
Japan is also considering other proposals to gain US concessions, including increased imports of US corn and soy, technical cooperation in shipbuilding, and revision to inspection standards for imported automobiles. However, there is uncertainty over whether the two sides can iron out differences over Japan’s priority, which is to win exemptions from US tariffs on automobile and auto parts.
Japan and the US are discussing several potential areas of agreement to ease trade tensions, including increased imports of US corn and soy, technical cooperation in shipbuilding, and revisions to inspection standards for imported automobiles. Additionally, Japan has proposed a mechanism to reduce the auto tariff rate based on contributions to the US auto industry.
These proposals aim to address the 25% auto tariffs imposed by Washington, which are particularly concerning for Tokyo as roughly 8% of all Japanese jobs are tied to the sector. A potential meeting between Japanese Prime Minister Shigeru Ishiba and US President Donald Trump on the sidelines of the G7 summit in Canada may provide further opportunities for the two countries to iron out their differences.