Japan will insist on tariff relief for its key auto industry in trade negotiations with the U.S., top negotiator Ryosei Akazawa said Tuesday. His remarks followed President Trump’s announcement of 25% tariffs on Japanese goods, set to begin August 1.
After a 40-minute call with U.S. Commerce Secretary Howard Lutnick, Akazawa said both sides agreed to keep negotiating a broad agreement covering trade expansion, non-tariff barriers, and economic security cooperation.
“There’s no point in any deal without resolving auto tariffs,” Akazawa stressed, adding Japan wouldn’t sacrifice its agricultural sector for a quick settlement.
Trump has signaled he might delay the tariffs if partners present acceptable proposals. Japan has no fixed deadline for an agreement.
The tariff uncertainty pushed the dollar to a two-week high against the yen as expectations faded for a July interest rate hike by the Bank of Japan. Finance Minister Katsunobu Kato said there were no plans to discuss currency issues with U.S. Treasury Secretary Scott Bessent.
Failure to secure a deal before Trump’s tariff freeze expired on July 9 has increased pressure on Japan, whose economy contracted in the first quarter. Analysts warn the 25% duties could shave 0.7 percentage points off annual growth and risk tipping the country into recession.