US-Japan trade deal – will this one be too tricky for Trump?
Trump also threatened to impose tariffs of 30 percent to 35 percent on Japan if a trade deal is not achieved, particularly in relation to US sales of rice and cars.
This has caused concern among automobile and electronic manufacturers in Japan, whose exports to the US fuel the Japanese economy.
Here is what we know about the US-Japan trade talks.
What did Trump say about a trade deal with Japan?
Most of Washington's trading partners are seeking trade deals as the July 9 deadline for the end of a pause on reciprocal tariffs looms closer.
Trade talks have continued between the US and Japan for some time. Japan's chief trade negotiator and economy minister, Ryosei Akazawa, is making arrangements for his eighth visit to the US as early as this weekend, Japanese broadcaster TV Asahi reported on Wednesday.
The US had a $69.4bn trading deficit with Japan in 2024, according to US federal data. Trump is seeking to close this. But this week, he voiced doubts about whether Washington and Tokyo could reach a trade deal at all.
'We've dealt with Japan. I'm not sure if we're gonna make a deal, I doubt it, with Japan,' Trump told reporters on board Air Force One on Tuesday.
'They and others are so spoiled from having ripped us off for 30, 40 years that it's really hard for them to make a deal.'
Why has Trump threatened Japan with new tariffs?
Trump threatened to impose a tariff of '30 percent or 35 percent' on Japan if a trade deal is not reached by the time the reciprocal tariff pause is lifted on July 9. A basic 10 percent tariff on goods imported to the US, including from Japan, has remained in place throughout this pause.
On April 2, when Trump announced his 'Liberation Day' reciprocal tariffs, he unveiled a 24 percent tariff for Japan on most goods except cars, aluminium and steel.
Trump says he does not plan to extend the pause for higher, reciprocal tariffs.
Once they are back in place, vehicles and car parts from Japan, as well as from other countries, face a 25 percent tariff. Aluminium and steel imports from all countries, including Japan, face a 50 percent tariff based on an order Trump signed on June 4.
Now, Trump is zeroing in on rice sales to Japan as well, alleging that Japan does not buy rice from the US. 'I have great respect for Japan, they won't take our RICE, and yet they have a massive rice shortage,' he wrote on his Truth Social platform on Monday. 'We'll just be sending them a letter, and we love having them as a Trading Partner for many years to come,' Trump added, without specifying any details about the letter.
Trump also claimed that Japan does not buy cars from the US. 'We didn't give them one car in 10 years,' he told reporters on Air Force One this week. During a Fox News interview that aired on June 29, Trump also said that Japan does not buy American cars and added: 'It's not fair.'
'So what I'm going to do is I'll write them a letter, say, 'We thank you very much. We know you can't do the kind of things that we need, and therefore you'll pay a 30 percent, 35 percent or whatever the numbers that we determine,' Trump said this week. 'Because we also have a very big trade deficit with Japan, as you know, and it's very unfair to the American people.'
Does Japan buy cars and rice from the US?
Yes. Contrary to what Trump told reporters this week, Japan bought $354.7m of rice from the US between May 2024 and April 2025, according to the trade data research group, Observatory of Economic Complexity (OEC).
Japanese rice imports from the US have in fact increased since the price of locally grown rice has surged. An extreme heatwave in 2023 yielded a substandard rice crop, leading to producers and manufacturers stockpiling rice that was available by early 2024.
Additionally, an earthquake hit southern Japan on August 8, 2024, which led to consumers stockpiling rice and triggering a rice shortage. The government has decided to release rice from its own emergency stockpile.
Figures from the Japan Automobile Importers Association also show that Japan imported 14,724 US passenger vehicles worth $1.04bn in 2024.
This is a far cry from sales of Japanese cars to the US, however. In 2023, for example, Japan exported cars worth $41bn to the US while importing cars worth just $1.25bn from the US, according to the OEC.
Why else have trade talks between Japan and the US stalled?
The Japanese government also faces domestic pressures with a national upper house election on June 20. The farm sector has traditionally been a significant voting bloc for Japanese PM Shigeru Ishiba's Liberal Democratic Party.
Trade negotiator Akazawa said on Tuesday that Japan would not sacrifice its agriculture sector during trade talks with the US.
'I have repeatedly stated that agriculture is the foundation of the nation. In negotiations with the United States, our stance remains unchanged: we will not engage in talks that would sacrifice the agricultural sector,' Akazawa told a media conference.
Ishiba is also opposed to any trade deal with Trump which does not roll back tariffs on cars.
'Japan is different from other countries as we are the largest investor in the United States, creating jobs,' Ishiba said on Wednesday during a debate with opposition leaders. 'With our basic focus being on investment rather than tariffs, we'll continue to protect our national interest.'
Furthermore, Japan is in a stronger position than many other countries as it is the largest foreign holder of US debt. According to recent reports, Japan holds more than $1 trillion in US Treasury securities, which may give it leverage in trade talks.
Has Japan responded to Trump's threat of higher tariffs?
Japan has so far declined to comment on this.
During a news conference in Tokyo on Wednesday, Japan's Deputy Chief Cabinet Secretary Kazuhiko Aoki said: 'We are aware of what President Trump said, but we don't comment on every remark made by US government officials.'
How much does Japan's economy depend on US exports?
While Japan does hold large amounts of US debt, it is more reliant on the US for exports than the other way around. The US is Japan's largest export market, accounting for 19.1 percent of total Japanese exports in 2023, according to the OEC.
Only 4.03 percent of US exports went to Japan in 2023. In that year, the US exported $7.7bn worth of petroleum gas to Japan.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
an hour ago
- Al Jazeera
US House of Representatives passes Trump's ‘One Big Beautiful Bill'
After nearly 29 hours of debate, the United States House of Representatives have passed the 'One Big Beautiful Bill', an enormous tax cut and spending package that represents a pillar of President Donald Trump's agenda. The lower house of the US Congress voted by a margin of 218 to 214 in favour of the bill on Thursday. All 212 Democratic members of the House opposed the bill. They were joined by Representative Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania. The bill now heads to the White House for Trump to sign it into law. The Republican president had called on his fellow party members to pass the legislation before July 4, the country's Independence Day. As a result of the new legislation, the US will lift its debt ceiling — the amount the federal government is allowed to borrow — by $5 trillion. The bill also pours tens of billions of dollars into immigration enforcement, one of Trump's top priorities, and it will also cement the 2017 tax cuts that Trump championed during his first term as president. To pay for those expenditures, the bill scaled back social initiatives like Medicaid — government health insurance for low-income households — and the Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps. The nonpartisan Congressional Budget Office has estimated that the bill will increase the number of people without health insurance by 17 million over the next 10 years. It also projected that the country's deficit — the amount of money the US owes — would climb by about about $3.3 trillion over the same period. Democratic lawmakers had slammed the bill as a massive redistribution of wealth from the poor to the rich, noting that the tax cuts will mainly benefit the wealthiest earners. Republican supporters like Trump have countered that the bill will fuel growth and cut waste and fraud in the programmes like Medicaid. Yet, not all conservatives backed the 'One Big Beautiful Bill' as it wound its way through the chambers of Congress. There were several Republican holdouts who feared how the Medicaid cuts would impact low-income and rural communities, and some fiscal conservatives objected to the increase in the national debt. 'FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE,' Trump said in a social media post on Wednesday night. 'RIDICULOUS!!!' Even Trump's erstwhile ally, billionaire Elon Musk, has publicly opposed the bill over provisions he described as 'pork'. A record-breaking speech In the lead-up to Thursday's vote, Democrats attempted to stall, with the stated aim of allowing voters more time to contact their local representatives in protest. The face of that effort was Democratic Minority Leader Hakeem Jeffries, who exercised a privilege known as the 'magic minute' that allows party leaders to speak as long as they want from the House floor. Jeffries stretched that privilege into an hours-long appeal to Republicans to stand up against what he described as Trump's harmful policies. He started at around 4:53am local time (8:53 GMT) and ended past 1:39pm (17:39 GMT). It was the longest speech ever delivered on the House floor, approximately eight hours and 44 minutes. 'I'm here to take my sweet time on behalf of the American people,' Jeffries told the House, his voice wavering at points during the speech. He directed his remarks to the speaker of the House, a role occupied by Republican Mike Johnson. 'Donald Trump's deadline may be Independence Day. That ain't my deadline,' Jeffries said. 'You know why, Mr. Speaker? We don't work for Donald Trump. We work for the American people.' Jeffries warned that the 'One Big Beautiful Bill' — which he dubbed the 'One Big Ugly Bill' — 'hurts everyday Americans and rewards billionaires with massive tax breaks'. The legislation, he added, was simply reckless. He called his colleagues across the aisle to show 'show John McCain-level courage', dropping a reference to the late Republican senator from Arizona, known for standing up to Trump on the question of healthcare. McCain has often been cited as a symbol of bipartisanship in Congress, and Jeffries urged his Republican colleagues to reach across the aisle. 'We acknowledged the election of President Donald Trump, offered to work with our colleagues on the other side of the aisle whenever and wherever possible in order to make life better for the American people,' Jeffries said. 'But the route, Mr Speaker, that has been taken by House Republicans is to go it alone and to try to jam this One Big Ugly Bill — filled with extreme right-wing policy priorities — down the throats of the American people.' In a poll last week from Quinnipiac University, for example, just 29 percent of respondents indicated they were in favour of the legislation, while 55 percent were against it. Jeffries later added, 'We're not here to bend the knee to any wannabe king,' comparing resistance to Trump to the US's revolutionary war era. When he finally said he would yield back the floor, Democrats exploded into applause, chanting his name: 'Hakeem! Hakeem! Hakeem!' A long road to the vote In order to reach Thursday's vote, the House had remained in session overnight, as part of a marathon session. But in the minutes before the dramatic vote took place, Speaker Johnson himself briefly spoke to the House, rallying Republicans to show a unified front. He also took a jab at Jeffries's record-breaking speech: 'It takes a lot longer to build a lie than to tell the simple truth.' 'We've waited long enough. Some of us have literally been up for days now,' Johnson continued. 'With this One Big Beautiful Bill, we are going to make this country stronger, safer and more prosperous than ever before, and every American is going to benefit from that.' He added that the 'One Big Beautiful Bill' would make programmes like Medicaid 'stronger with our reforms'. It has been a long road for Republicans to reach Thursday's vote, stretching back months. The House first passed the 'One Big Beautiful Bill' on May 22, in another overnight vote. In that vote, the legislation passed by the narrowest of margins, with 215 voting in favour and 214 against. Representatives Thomas Massie of Kentucky and Warren Davidson of Ohio joined a unified Democratic front in voting against the bill at that time, and Maryland's Andy Harris voted 'present'. Two more Republicans missed the vote entirely. That propelled the bill to the Senate, where it faced another uphill battle. The 100-seat chamber has 53 Republicans and 47 Democrats and left-leaning independents. To avoid facing a Democratic filibuster, Republicans subjected the 'One Big Beautiful Bill' to the Byrd Rule, which allows legislation to pass with a simple majority. But in order to comply with the Byrd Rule, Republicans had to strike provisions that had little to no budget impact or increased the deficit outside of a 10-year window. Still, the revised Senate version of the bill faced a nail-biter of a vote. On July 1, after another all-nighter, the vote was 50 to 50, with three Republicans siding with the Democrats. Vice President JD Vance cast the tie-breaker to advance the bill. Democrats did, however, notch a small symbolic victory, with Senator Chuck Schumer knocking the name 'One Big Beautiful Bill' off the final piece of legislation. It was the Senate's version of the bill that the House voted on Thursday. At least one Republican senator, Lisa Murkowski of Alaska, has expressed distaste for the legislation since voting for its passage. 'It is the people of Alaska that I worry about the most, especially when it comes to the potential loss of social safety net programs — Medicaid coverage and SNAP benefits — that our most vulnerable populations rely on,' she wrote in a statement earlier this week. 'Let's not kid ourselves. This has been an awful process — a frantic rush to meet an artificial deadline that has tested every limit of this institution.'
Al Jazeera
an hour ago
- Al Jazeera
Russia ‘will not back down' on Ukraine war goals, Putin tells Trump
Russian President Vladimir Putin has told his United States counterpart, Donald Trump, that Moscow will not give up on its goal of eliminating the 'root causes' of the war in Ukraine. 'Russia will not back down,' Kremlin aide Yuri Ushakov told reporters although he added that Putin had also expressed a 'readiness' to 'seek a political and negotiated solution to the conflict' during his one-hour phone conversation with Trump on Thursday. The phrase 'root causes' is shorthand for the Kremlin's argument that it was compelled to launch a full-scale invasion of Ukraine in 2022 to prevent the country from joining NATO and being used by the Western alliance as a launchpad to attack Russia – arguments rejected by Kyiv and its allies but supported in part by Trump. The phone call, their sixth since Trump started his second term in January, came the day after the Pentagon confirmed it was halting some weapons deliveries to Kyiv, including air defence missiles and precision-guided artillery. They were promised under President Joe Biden's administration. The announcement was made as Russia has intensified its attacks on Ukraine Trump and Putin did not broach the subject of the paused weapons deliveries, according to the Kremlin aide, who said the US president had raised the issue of bringing about a swift end to the war. While the prospect of a face-to-face meeting was not discussed, the two leaders agreed to keep talking. Although Trump has tried to mediate in the Ukraine war, he has little progress to show for it. Putin has thus far rejected Washington's proposal for an unconditional ceasefire, and there was nothing in the Kremlin readout to suggest any shift in his position. Ukraine supported the proposal. Ushakov said that while Russia was open to continuing to speak with the US, any peace negotiations needed to occur between Moscow and Kyiv. He made the comment amid some indications that Moscow is trying to avoid a trilateral format for any peace negotiations. Ukrainian officials have said Russian negotiators asked US diplomats to leave the room during a meeting in Istanbul in early June. Putin and Trump last talked in mid-June when Putin offered to mediate in the recent 12-day Iran-Israel war. Trump responded to Putin's offer by switching the focus back to Ukraine, saying: 'No, I don't need help with Iran. I need help with you.' Ushakov said that during Thursday's call, Putin emphasised the need to resolve all 'disputes, disagreements and conflict situations' regarding Iran through diplomatic means. The US waded into the Israel-Iran conflict last month, bombing three of Iran's nuclear sites, a move condemned by Moscow as unprovoked and illegal. Earlier on Thursday, Ukrainian President Volodymyr Zelenskyy met European Union leaders in Denmark, saying doubts over US military aid to Ukraine reinforced the need to 'strengthen our cooperation and coordination through the EU, NATO and also in our direct relations'. Trump has in effect nixed Ukraine's attempts to join the NATO military alliance. Zelenskyy told reporters he hopes to speak to Trump as soon as Friday about the pause in weapons shipments.
Al Jazeera
2 hours ago
- Al Jazeera
US economy adds 147,000 jobs despite economic uncertainty
The United States economy has added 147,000 jobs in June, beating analyst expectations, as the labour market remains stable despite economic uncertainty driven by President Donald Trump's policies. The Department of Labor released the numbers on Thursday. The data, which was released a day early because the Independence Day holiday falls on Friday, showed the unemployment rate ticked down from May by 0.1 percentage points to 4.1 percent. The average workweek was shorter last month, suggesting businesses were probably reducing hours amid rising economic headwinds. Government jobs at the state and local levels led the gains, adding 73,000 positions in June. State governments added 47,000 jobs, led by 40,000 in education. Local government jobs grew by 23,000. A downward turn continues at the federal level with a loss of 7,000 jobs, which accounts for 69,000 jobs lost since January. Gains in government jobs were followed by the healthcare sector, which added 39,000 jobs. Social assistance employment increased by 19,000 jobs. 'On net, it was a good report,'' Sarah House, senior economist with Wells Fargo, told The Associated Press news agency. 'But when you dig underneath the surface, it was another jobs report that didn't look quite as good as first meets the eye.'' Looming uncertainty driven by Trump's tariffs and immigration policies led to little change across much of the private sector in terms of hiring, including in construction, mining, oil and gas extraction, wholesale and retail trade, transportation, financial services, professional and business services, and leisure and hospitality. Trump's constant changes in tariffs policy, announcing and suspending import taxes and then coming up with new ones, has left businesses bewildered and hesitant to make decisions about hiring and investment. Layoffs have started, but they are still relatively low. The Labor Department's weekly jobless claims report, which also came out on Thursday said claims fell by 4,000 to 233,000. The ADP private payroll report out on Wednesday showed a net loss of 33,000 jobs. 'Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,' said Nela Richardson, chief economist at ADP. Thursday's jobs report also showed average hourly wages came in cooler than forecasters expected, rising 0.2 percent from May and 3.7 percent from a year earlier. The year-over-year number is inching closer to the 3.5 percent year-over-year number considered consistent with the Federal Reserve's 2 percent inflation target. 'For the FOURTH month in a row, jobs numbers have beat market expectations with nearly 150,000 good jobs created in June,' White House Press Secretary Karoline Leavitt said in a statement. 'The economy is booming again and it will only get better when the One, Big, Beautiful Bill is passed and implemented,' she said, referring to Republican legislation to cut taxes, food assistance and the Medicaid health insurance programme for low-income Americans. Growth slowdown Despite the White House's characterisation, the US job market has cooled significantly in the past year. This year, employers have added an average of 130,000 jobs per month, down from an average of 186,000 in 2024. From 2021 to 2023, the US economy added an average of 400,000 jobs per month as it made up for jobs shed during the COVID-19 pandemic. Other data show the US economy contracting. Last week, a report from the Department of Commerce found the US economy shrank by 0.5 percent in the first quarter. The US labour force – the count of those working and looking for work – fell by 130,000 last month after a drop of 625,000 in May. Economists expected Trump's immigration deportations – and the fear of them – to push foreign workers out of the labour force. The Labor Department said the number of workers who believe no jobs are available for them rose by 256,000 last month to 637,000. Wells Fargo expected monthly job growth to fall below 100,000 in the second half of the year. 'We're bracing for a much lower pace of job growth,' House said. 'There's still a lot of policy uncertainty.'
