Japan swallows 25% tariffs, business leaders criticize government for “misjudgment” in trade negotiations with the US
US President Trump has issued tariff notifications to various countries this week, including a 25% tariff on Japan. The Financial Times reported that Takeshi Niinina, chairman of the Japan Business Executives Association and CEO of Suntory Holdings, accused the Japanese government of making “mistakes” in trade negotiations with the United States, saying that the Japanese government underestimated Trump’s determination.
Sina said that Japan’s insistence on completely exempting tariffs may make Trump feel “betrayed”, and if Japanese negotiators show more flexibility, Japan’s tariff rate may be only 10%. He told the Financial Times: “Japan underestimated Trump’s determination. They thought time was on Japan’s side, which was a big mistake.”
Sina also said that Japan is now in a weak position and may be forced to make major concessions before reaching an agreement. He pointed out that the window for reaching an agreement is shrinking. Japan will hold a Senate election on the 20th of this month, and the Liberal Democratic Party led by Prime Minister Shigeru Ishiba is in a tight election situation.
Sina said: “Maybe everything is too late.”
HSBC said on the 8th that Japan may find it most difficult to make further concessions. “Ishiba’s ruling coalition is under enormous pressure to protect auto exporters, rice farmers and other key constituencies ahead of the Senate election on the 20th,” they said.
The move follows weeks of seemingly fruitless negotiations between Japan and the United States, despite claims of progress from both sides. Trump accused Japan last week of being “spoiled” for refusing to commit to buying more U.S. rice and allowing U.S.-made cars into the Japanese market.
Sina said Japan’s intransigence, including Ishiba’s refusal to sacrifice rice farmers to protect Japan’s auto industry, wasted the legacy of late Prime Minister Shinzo Abe, who had a good relationship with Trump during his first term as president. Sina said: “Trump has high expectations for Japan because of Abe and believes Japan can be a role model.”
David Boling, director of Japan and Asian trade at the think tank Eurasia Group, agreed with Sina’s criticism. Boling was a U.S. official who participated in the negotiations for the U.S.-Japan trade agreement that took effect in 2020. “Japan has taken an extreme position, demanding that the United States must remove all tariffs, which is a serious misjudgment. If Japan wants to reach an agreement before August 1, it must be more pragmatic,” he said.
