According to media reports, Japan's chief trade negotiator Ryosei Akazawa recently stated that Japan cannot accept the United States' proposed 25% tariff on imported automobiles. He emphasized that Japanese automakers produce far more vehicles in the U.S. than they export there.
Ahead of his trip to Washington for the seventh round of Japan-U.S. trade talks, Akazawa noted that Japanese carmakers manufacture approximately 3.3 million vehicles annually in the United States, compared to 1.37 million vehicles exported to the U.S. He also highlighted that Japanese automotive companies have invested over $60 billion in the U.S. and created 2.3 million jobs locally.
"We have repeatedly explained to the U.S. that Japan's auto industry contributes significantly to the U.S. economy," Akazawa said. "We will continue to make this point clear and seek the U.S.'s understanding. From any perspective, imposing a 25% tariff on Japanese vehicles is unacceptable."
The issue of auto tariffs has emerged as a central point of contention in the bilateral negotiations. The U.S. aims to reduce its trade deficit with Japan in the automotive sector, while Japan is determined to protect its critical auto industry. Despite six previous rounds of negotiations over more than two months, no breakthrough has been achieved on the tariff issue.
Akazawa also pointed out that of the 3.3 million vehicles produced in the U.S., around 300,000 are exported from the U.S. to other countries, contributing to a trade surplus for the U.S. as well.
Nevertheless, Japan's trade surplus with the U.S. reached 8.6 trillion yen (approx. $59.4 billion) last year, the fifth-largest in history. Roughly 82% of this surplus came from automobiles and auto parts, making Japan's car exports a primary target for President Trump, who advocates for an "America First" approach and aims to cut the U.S. trade deficit by raising import tariffs.
Before Akazawa's departure for Washington, Japanese Prime Minister Shigeru Ishiba and President Trump failed to reach a deal on tariffs during the G7 Summit. Like many other countries, Japan faces dual pressure from the U.S.-comprehensive reciprocal tariffs and industry-specific duties. If negotiations fail, broad tariffs are set to rise from 10% to 24% on July 9, while sectoral tariffs would include a 25% duty on automobiles and auto parts, and a 50% tariff on steel and aluminum.
The Japanese government has maintained its position of seeking to resolve all tariff disputes through a comprehensive package, including sectoral issues. Akazawa stated he is mindful of the July 9 deadline, but cautioned that setting a firm deadline could weaken Japan's bargaining position.
U.S. tariff policy has already begun to impact the Japanese economy, with sharp declines in exports to the U.S., particularly in the automotive sector. As Japan heads into its Upper House elections on July 20, the country faces the risk of falling into technical recession.
