Trade negotiations between Japan and the United States are headed for an impasse with the two sides unable even to settle on a starting point for an agreement after two rounds of high-level discussions.
Ryosei Akazawa, Japan's tariff czar, said on Saturday negotiations won’t go forward without the tariffs already in place being included in the current talks.
This would include the 25% duties on autos, auto parts, steel and aluminum products and the 10% duties on most other imports.
“Unless these elements are properly included in the package, we don't believe an agreement can be reached,” he said.
The United States might have offered a proposal that falls far short of that demand. According to news reports, the U.S. last week proposed a framework agreement only focused on the higher “reciprocal” tariffs, and showed reluctance to lower across-the-board tariffs on autos, steel and aluminum.
If the reports are true, Japan and the United States haven't even come to an agreement on what they are discussing.
Following the talks in Washington, Prime Minister Shigeru Ishiba indicated that this might be the case. He said the two sides have “not yet reached a point where common ground has been found.”
U.S. President Donald Trump has been rolling out wave after wave of tariffs since March. His higher "reciprocal" tariffs were put into place for a few hours on Apr. 9 before being delayed for 90 days.
If they were to go into effect again, most goods imported into the United States from Japan would be subject to 24% tariffs.
Trump has said he wants concrete proposals to lower Japan's trade surplus with the United States, which is running at about $63 billion a year, before considering a reduction in the rates.
Akazawa returned to Tokyo on Saturday from a four-day trip to Washington, where he attended the second round of tariff negotiations with U.S. Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.
The talks remained friendly but resulted in no breakthroughs, with both the United States and Japan signaling no change in their respective stances.
"We are continuing to strongly request a full review of this entire series of tariff measures,” Akazawa said on Wednesday.
Suggestions of a possible softening in the stance have been offered in Tokyo despite earlier indications that backing down was a nonstarter for Japan.
“Our understanding is that it’s not asking about exemption from the outset,” ruling Liberal Democratic Party’s Itsunori Onodera, who chaired a Wednesday party meeting on the U.S. tariffs with Akazawa in attendance, told reporters afterward.
While both Japan and the U.S. have said they will aim for a deal as soon as possible, they have also indicated that they aren't in a rush for a swift settlement.
Eyeing presidential elections in South Korea and Upper House elections in Japan, Bessent said last month that these countries are “more keen” to reach an early agreement so that they could “go home and campaign on it.”
Akazawa said that Japan would take a “hurry slowly” approach.
“This is a conversation between politicians, so I’m sure both sides are fully aware of each other’s political schedules. But we must set that aside,” he said Thursday when asked about Bessent’s remarks.
The possibility of major concessions — such as a significant increase in agriculture imports from the U.S. — is already causing worry in the ranks of the ruling LDP.
The public needs to consider whether it suits Japan’s national interests to rely on foreign countries for a staple food such as rice, Agriculture Minister Taku Eto, a member of the ruling party, told reporters last month.
“What the ruling party and the government are most wary of is that if a deal is reached in which Japan is forced to make major concessions, particularly through a significant increase in agricultural imports, it will spark strong domestic criticism and become a headwind in the upcoming election,” wrote Takahide Kiuchi, chief economist at Nomura Research Institute, in a report on Friday.
To patiently continue tariff negotiations with the U.S. could essentially become a time-buying strategy — until the Trump administration decides to lower tariff rates across the board to mitigate the negative effects on its own economy and financial markets, Kiuchi wrote.
“While the impact of tariff measures is certainly significant, it is still smaller compared to the scenario in which Japan accepts policies aimed at swiftly eliminating its trade surplus with the United States,” he said in the report.