Japan will start a third round of tariff talks with the US on May 24, 2025 with Economic Revitalization Minister Ryosei Akazawa visiting the US for three days.

The talks will focus mainly on automobile tariffs and other trade disputes, with Akazawa meeting US Trade Representative Jamieson Greer.

Before these talks, Japanese officials have been in Washington for working-level meetings to prepare the agenda.

Japan will likely push for removing tariffs on cars, steel, and aluminum imposed by President Donald Trump, while the US wants reciprocal tariffs on Japanese goods.

The two countries previously agreed on May 1, 2025 to hold more detailed talks starting in mid-May.

🔗 Source: Jiji Press

🧠 Food for thought

1️⃣ History of US-Japan auto trade tensions shows consistent patterns despite changing economic landscape

The current negotiations reflect a recurring pattern in US-Japan trade relations dating back to the 1980s, when similar tensions emerged over automobiles and steel.

During that period, the Reagan administration imposed tariffs and quotas on Japanese goods, including a 100% tariff on $300 million worth of imports in 1987, as part of efforts to address a growing trade deficit 1.

These historical tensions led to significant market adjustments, with Japan agreeing to limit car exports to the US and eventually shifting more production to US soil to avoid tariffs 2.

Despite these measures, historical analysis shows that trade restrictions largely failed to eliminate the US-Japan trade imbalance, suggesting that tariffs alone may not effectively address structural economic differences 3.

The current negotiations continue this decades-long pattern, with Japan again urging the US to remove tariffs on automobiles, steel, and aluminum, while the US focuses on establishing what it terms “reciprocal tariffs.”

2️⃣ Recent tariff impacts reveal asymmetric market access in automotive trade

The negotiations are occurring against a backdrop of significant tariff disparities, with Japan maintaining a zero-tariff policy on imported passenger vehicles while the US has increased its tariff from 2.5% to 25% under the Trump administration 4.

Despite Japan’s zero-tariff environment, US automakers hold less than 2% of the Japanese auto market as of 2024, indicating that non-tariff barriers and consumer preferences remain significant factors beyond formal trade policies 4.