President Donald Trump said this week he is not convinced that the US will reach a trade deal with Japan ahead of next week’s deadline to revive global tariffs that were suspended three months ago.
Trump also threatened to impose tariffs of 30% to 35% on Japan, particularly if trade contracts are not achieved in relation to the sale of the US and automobiles.
This has sparked concerns among Japanese automobiles and electronics manufacturers, with their exports to the US fueling the Japanese economy.
This is what we know about US trade consultations.
What did Trump say about his trade agreement with Japan?
Most Washington trading partners are seeking trade contracts as the deadline for mutual tariff suspensions is approaching.
Trade talks have been going on between the US and Japan for a while. Japan’s lead trade negotiator and economy minister Akihabara was visiting the United States for the eighth visit this weekend, Japanese broadcaster Television Asagi reported on Wednesday.
The US had a trade deficit of $69.4 billion with Japan in 2024, according to US federal data. Trump is about to close this. However, this week he expressed doubts about whether Washington and Tokyo could reach a trade deal.
“We dealt with Japan. I don’t know if we’ll do a deal, I doubt it, I doubt it,” Trump told reporters on board Air Force 1 on Tuesday.
“They and others have torn us apart for 30 or 40 years, so it’s really hard for them to make a deal.”
Why did Trump threaten Japan with new tariffs?
Trump threatened to impose a “30% or 35%” tariff on Japan if the trade contract was not reached by the time the mutual tariff suspension was lifted on July 9th. A basic 10% tariff on goods imported from Japan and imported into the US remains throughout this suspension.
On April 2, when Trump announced his “liberation day” mutual tariffs, he announced Japan’s 24% tariffs on most goods except cars, aluminum and steel.
Trump says he has no plans to extend the suspension due to higher, mutual tariffs.
Once they return, vehicles and auto parts from Japan, like other countries, will face 25% tariffs. Aluminum and steel imports from all countries, including Japan, face 50% tariffs based on Trump’s order signed on June 4th.
Currently, Trump has no sales of rice to Japan, and Japan claims that it will not buy rice from the United States. “I have great respect for Japan. They don’t take away our meals, but they have a massive rice shortage,” he wrote on his Truth Social Platform on Monday. “We just send letters to them and we love having them as partners of our trading partners for years to come,” Trump added without specifying details of the letter.
Trump also insisted that Japan would not buy cars from the US. “We didn’t give one car within 10 years,” he told Air Force 1 reporters this week. In an interview with Fox News that aired on June 29, Trump also said that Japan did not buy American cars and added that “it’s not fair.”
“So what I’m trying to do is write a letter because I know I can’t do what I need to do. “You know, we have a very large trade deficit with Japan and are very unfair to Americans.”
Do Japan buy cars and rice from the US?
yes. Contrary to what Trump told reporters this week, Japan purchased $354.7 million in rice from the US between May 2024 and April 2025.
Japanese rice imports from the US have actually been rising since the prices of locally grown rice rose sharply. The extreme heat wave of 2023 provided substandard rice crops, leading to availability producers and manufacturers stockpiling rice by early 2024.
Furthermore, the earthquake struck by southern Japan on August 8, 2024, causing consumers to stockpile rice, causing a shortage of rice. The government has decided to release the rice from its own emergency stockpile.
The Japan Automobile Importers Association figures also show that in 2024 it imported 14,724 US passenger cars worth $10.4 billion.
However, this is far from selling Japanese cars to the US. In 2023, for example, according to the OEC, Japan exported $41 billion worth of cars to the United States, while importing only $1.25 billion worth of cars from the United States.
Why did the trade conference between Japan and the US stagnate?
The Japanese government is also facing domestic pressure in the national Senate election on June 20th. The farm sector has traditionally been a key voting block for the Liberal Democratic prime minister of Japan’s Isba.
Trade negotiator Akazaki said Tuesday that Japan will not sacrifice its agricultural sector during trade talks with the US.
“I have repeatedly stated that agriculture is the foundation of the people. Our attitude remains unchanged in negotiations with the US. We will not be involved in consultations at the expense of the agricultural sector,” Akazawa told the Media Conference.
Isba is also opposed to a trade deal with Trump that does not roll back car tariffs.
“We are the largest investor in the United States and create jobs, so Japan is different from other countries,” Isba said Wednesday in discussions with opposition leaders. “Our fundamental focus is on investment rather than tariffs, so we will continue to protect our national interests.”
Furthermore, Japan is in a stronger position than many other countries. This is because they are the largest foreign holder of US debt. A recent report shows that Japan holds more than $1 trillion in US Treasury securities and could leverage trade talks.
Has Japan responded to the Trump threat of higher tariffs?
Japan has refused to comment on this so far.
During a press conference in Tokyo on Wednesday, Japan’s Deputy Prime Minister Aoki Nishiko Bureau said:
How dependent is Japan’s economy on US exports?
Japan holds a large amount of US debt, but it relies on the US for export. According to the OEC, the US is Japan’s largest export market, accounting for 19.1% of Japan’s total exports in 2023.
In 2023, only 4.03% of US exports were sent to Japan. That year, the US exported $7.7 billion worth of oil and gas to Japan.
