Japan Prepares for ‘Pilot’ Trade Negotiations with the US Following Trump’s Tariffs

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Japan’s chief trade negotiator has made his first trip to Washington since Donald Trump enforced heavy tariffs, initiating discussions that will outline the US’s expectations and provide broader insights into the factors influencing the president’s trade conflict.

Tokyo has been proactive in seeking dialogue with US officials to avoid the burdensome “liberation day” tariffs that Trump has placed on various countries. The US president announced these tariffs on April 2, but last week, he temporarily delayed their implementation for 90 days due to market upheaval.

Diplomats noted that Japan’s position as a “test case” in trade negotiations could offer it leverage over other nations, but it also makes the nation a benchmark for how merciless the US administration might be with allies and adversaries alike. Japan’s trade surplus with the US ranks among the top ten globally.

“In light of the recent uncertainties, the use of tariffs as a weapon, and the rhetoric surrounding a trade war — amid all of this, we have yet to clearly see what Trump aims to achieve,” remarked a source involved with the negotiations.

“While Japan may not welcome this role, its key contribution could be clarifying the situation at the forefront.”

Takeshi Niinami, chair of the Japan Association of Corporate Executives, mentioned that the discussions would provide nations, markets, and businesses with a “preview” of how the Trump administration approaches negotiations.

The two-day visit by Ryosei Akazawa, who will engage with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, follows Prime Minister Shigeru Ishiba’s declaration of a “national crisis” concerning the potential impact on trade.

Trump’s introduction of a 24 percent “reciprocal tariff” on Japan has caused discontent due to Japan’s status as a reliable military ally and its role as the largest foreign investor in the US over the last five years.

Despite Trump’s recent moratorium, Japan still contends with a 25 percent tariff on car exports to the US, in addition to the general 10 percent levy applicable to most of America’s trading partners.

Niinami indicated that the selection of Bessent as the chief US negotiator indicated Washington’s emphasis on pressuring Japan to address yen weakness and ensure the stability of the US Treasuries market, where the Japanese government is a major participant with around $1.1 trillion in foreign currency reserves.

Sources familiar with the discussions indicated that the US has identified several priorities, including facilitating Japan’s import of more liquefied natural gas, enhancing Japanese access to US agricultural products such as rice and wheat, and resolving discrepancies in vehicle safety standards that Washington believes hinder sales in Japan.

The US Treasury did not comment on inquiries regarding the Trump administration’s objectives for the negotiations.

Officials in Tokyo stated that Japan was open to discussing a variety of topics, including increased procurement of US military equipment, infrastructure investments in the US, and collaboration in shipbuilding.

In 2019, Japan’s then-prime minister Shinzo Abe, known as the “Trump whisperer” for his close relationship with the president, quickly secured a trade agreement with the US that primarily eased some restrictions on certain US agricultural products and included provisions for digital commerce.

Trump labeled the deal as “phenomenal,” and Abe successfully presented it domestically as a sign of robust US-Japan relations.

“This time around, we have many options on the table, but the context of negotiations is entirely different compared to last time,” Niinami remarked.

Experts suggest that Japan will prioritize addressing the US auto tariffs in these talks.

“Japan will likely seek to have the auto tariffs put on hold,” indicated Matt Goodman, an expert on US-Japan economic ties at the Council on Foreign Relations. “However, persuading Trump to relent on the auto tariffs might prove to be the most challenging aspect.”

Tobias Harris, founder of the political risk consulting firm Japan Foresight, stated that the lack of clarity regarding the US side’s objectives for the discussions places Japan and Ishiba in a challenging position compared to the previous scenario under Abe.

“Quick agreements seem unlikely. If the US demands substantial concessions in agriculture, that’s not an issue that can be resolved swiftly, even in ideal conditions, and right now, conditions do not seem favorable,” Harris noted.

“Additionally, it’s apparent that Tokyo does not intend to accept a poor deal on its terms,” he added. “Ishiba faces a difficult task; conceding to US requests could have domestic repercussions.”

Jeff Kingston, a foreign policy scholar at Temple University in Japan, acknowledged that the significance of the negotiations is heightened by Japan’s concerns regarding the US’s commitment to maintaining regional stability in Asia, where the US plays a critical security role.

Recent actions by the Trump administration have particularly agitated Japan, which relies on the US for its defense.

In particular, Trump’s view on Russia’s incursion into Ukraine has raised fears that the US may be less willing to engage militarily during a potential Chinese attack on Taiwan.

Simultaneously, Japan’s economy, heavily dependent on exports, is extremely susceptible to global downturns and any deterioration of the international rules-based system.

“Japan must adopt a strong stance for domestic audiences, but ultimately, they will take necessary steps to keep Trump aligned with Japan’s interests,” Kingston asserted. “The challenge lies in the fact that Trump manipulates uncertainty as a negotiation tactic, and Japan is not in a position to take significant risks.”