Japan Seeks Concessions on US Auto Tariffs Amid New US-UK Trade Agreement

Japan has reiterated its demand for the removal of U.S. tariffs on automobiles following the US-UK trade agreement, which includes a reduced 10% tariff on UK vehicles. Economic Revitalization Minister Ryosei Akazawa emphasized Japan's unchanged stance and the importance of eliminating tariffs imposed by the Trump administration. Japan, a major auto exporter to the U.S., faces a 25% tariff on its vehicles and is preparing for trade talks with the U.S. in mid-May. The Japanese government is analyzing the US-UK deal to inform its negotiation strategy, aiming for a comprehensive agreement.

Japan’s Position: No Change in Stance on Auto Tariffs

Japan’s Economic Revitalization Minister Ryosei Akazawa stated on Friday that Tokyo’s position remains unchanged despite the recent US-UK agreement. “There is no change in our position,” Akazawa said during a press conference, reiterating Japan’s call for the complete removal of additional tariffs imposed by the Trump administration on automobiles, vehicle parts, steel, and aluminum products. He emphasized that Japan “regrets” the imposition of these tariffs and will continue to seek their full elimination in upcoming negotiations with the United States.

Akazawa acknowledged the US-UK deal but noted that “each country’s position and situation is different,” and therefore the content and timing of agreements will naturally vary. He added that Japan is closely analyzing the details of the US-UK agreement to inform its own negotiation strategy.

Auto Industry at the Center of Japan’s Concerns

The Japanese government has made it clear that the automobile sector is a non-negotiable priority. The U.S. currently imposes a 25% tariff on Japanese cars, which has significantly impacted Japan’s auto industry. Toyota, the world’s largest carmaker by sales, has forecast a 21% drop in operating profit for fiscal year 2025–26 due to the tariffs. The Japanese government views the auto sector as a “core industry” and has stated it cannot make concessions in this area.

The recent US-UK agreement, which reduces tariffs on UK-made cars to 10% for up to 100,000 vehicles annually, has been interpreted by some Japanese officials as a signal that the U.S. may not be willing to lower tariffs below that threshold. However, Japan has indicated it will not accept a 10% tariff as a final outcome and will continue to push for full exemption.

Trade Negotiations: Japan Prepares for Next Round

Japan and the United States are scheduled to hold a third round of ministerial-level trade talks in mid-May. The Japanese government has formed a task force to analyze the US-UK agreement and identify elements that could be leveraged in its own negotiations. Trade Minister Yoji Muto stated that his ministry would “carefully assess” the US-UK deal and determine which aspects could be brought up in discussions with Washington.

Muto also emphasized the importance of reaching an agreement quickly, saying, “We must determine whether there are parts that can serve as a reference. We want to work hard to reach an early conclusion.”

Broader Economic Impact and Strategic Considerations

The tariffs have already had a measurable impact on Japan’s economy. According to the Research Institute of Economy, Trade and Industry (RIETI), the uncertainty surrounding U.S. trade policy could suppress Japan’s GDP by as much as 0.9%. Japan’s exports slowed in April, with the Finance Ministry reporting a 2.3% year-on-year increase in the first 20 days of the month, down from 4.2% in March. The slowdown has been attributed to both a stronger yen and the imposition of U.S. tariffs on Japanese goods, including steel, aluminum, and automobiles.

In addition to the direct economic effects, Japanese officials are also concerned about the broader implications of the Trump administration’s tariff strategy. The U.S. has signaled a baseline 10% tariff for all countries, with higher rates for key trading partners such as Japan, China, and the European Union. While the UK secured a partial reprieve, Japan remains subject to a 25% tariff on cars and a minimum 10% levy on other goods, with the possibility of the original 24% across-the-board rate returning in July after a temporary reprieve expires.

Japan’s Strategy Moving Forward

Japan’s approach to the negotiations is shaped by both economic necessity and strategic calculation. While the U.S. has expressed a desire for quick results in its talks with over 60 countries, Japanese officials are wary of accepting a deal that does not fully address their concerns. Akazawa’s presence at the first round of negotiations in April, which was also attended by President Trump, was seen as a sign of the U.S. administration’s urgency. However, Japanese negotiators remain focused on securing a comprehensive agreement that includes the full removal of tariffs on key exports.

The Japanese government is also considering the broader geopolitical context. Officials have noted that the UK’s trade deficit with the U.S. made it easier for London to reach an agreement, whereas Japan’s trade surplus complicates its position. Nonetheless, Tokyo is determined to use the US-UK deal as a precedent to push for similar or better terms, particularly in sectors where Japan has a competitive advantage.

Japan Seeks Concessions on US Auto Tariffs Amid New US-UK Trade Agreement

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