Japan’s chief trade negotiator, Ryosei Akazawa, may visit Washington next week for a third round of trade discussions with the United States, according to sources.

The timing of the visit will depend on progress made during ongoing staff-level negotiations.

Japan is preparing proposals that include increased imports of US corn and soy, shipbuilding technical cooperation, and changes to inspection standards for imported vehicles.

However, significant differences remain, particularly regarding Japan’s request for exemptions from US tariffs on automobiles and auto parts.

These exemptions are vital to Japan’s economy.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Japan-US auto trade continues decades-long pattern of asymmetric negotiations

The current talks represent the latest chapter in a long history of imbalanced auto sector negotiations that have defined the relationship since the 1980s.

While Japan maintains a zero-tariff policy on imported vehicles, American cars account for less than 2% of Japan’s market in 2024 due to non-tariff barriers including regulatory differences and consumer preferences for compact vehicles 1.

This stark contrast with the US’s newly imposed 25% tariff on Japanese autos and parts echoes previous decades of tension, particularly the 1980s auto conflict driven by America’s current account deficit and perceived threats to economic dominance 2.

Japanese automakers now face projected losses exceeding $19 billion from these tariffs, with Toyota alone anticipating a ¥180 billion ($1.2 billion) impact for just April-May 2025 3, forcing companies to delay investments and reconsider North American production strategies.

The ongoing negotiations reflect a historical pattern where Japan’s export-dependent economy (with approximately $41 billion in US-bound vehicle exports last year) gives the US significant leverage in trade negotiations 4.

2️⃣ Japan faces tougher negotiating position as US secures deals with other partners

Japan’s position in trade talks is complicated by the US successfully reaching agreements with other major trading partners, potentially weakening Japan’s bargaining power.

While Japan was the first major economy to start bilateral trade talks under the renewed Trump administration, both Britain and China have already secured deals, with China negotiating a substantial reduction in tariffs from 145% to 30% 5.