{"id":273758,"date":"2025-07-19T04:01:27","date_gmt":"2025-07-19T04:01:27","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/273758\/"},"modified":"2025-07-19T04:01:27","modified_gmt":"2025-07-19T04:01:27","slug":"a-u-s-japan-trade-impasse-as-ishiba-faces-another-election","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/273758\/","title":{"rendered":"A U.S.-Japan Trade Impasse as Ishiba Faces Another Election"},"content":{"rendered":"

The stakes are unusually high in Sunday\u2019s Upper House election. Prime Minister Ishiba Shigeru leads a minority government, and his cabinet\u2019s approval rating has been consistently low. A July 14 poll by NHK registered<\/a> only 31 percent approval, the lowest of his tenure and hardly cause for optimism days before the election. But Ishiba faces yet another, and more troubling headwind\u2014the Trump administration\u2019s erratic tariff policies. \u00a0<\/p>\n

The past ten months have been a struggle for Japan\u2019s prime minister. Winning by only twenty-one votes<\/a> in his party\u2019s leadership contest last September, he went on to preside over a trouncing<\/a> of the LDP the following month in the Lower House election. Only last-minute offers of policy compromise with opposition parties led to his selection as prime minister, and a minority government was formed. Parliamentary committee control also had to be shared, with the largest opposition party, the Constitutional Democratic Party of Japan (CDPJ), taking over leadership of the powerful budget committee. Throughout the spring, Ishiba battled to reach a deal on the government\u2019s budget and to assuage concerns among the public about the rising cost of living. \u00a0<\/p>\n

More on:<\/p>\n

\n Japan<\/a>\n <\/p>\n

\n Indo-Pacific<\/a>\n <\/p>\n

\n Elections and Voting<\/a>\n <\/p>\n

\n Tariffs<\/a>\n <\/p>\n

But a weak political base is not Ishiba\u2019s only problem. The prime minister also had to navigate the transition in U.S. leadership. During his first term in office, Donald J. Trump and Shinzo Abe developed a strong personal relationship, but Abe\u2019s death meant that Ishiba had to build his own relationship with Trump and his new administration. On February 7, Ishiba traveled<\/a> to Washington, D.C., the second foreign leader to visit the Trump White House. Outwardly, the visit seemed a success; the optics were good, and the personal vibe was positive. Many Japanese observers believed that the special relationship between Tokyo and Washington would continue.<\/p>\n

Asia Unbound<\/p>\n

CFR fellows and other experts assess the latest issues emerging in Asia today.\u00a01-3 times weekly.<\/p>\n

There were issues, to be sure, that promised difficult negotiations ahead. Trump remained wedded to the idea that tariffs could be an effective weapon for recalibrating allied ties. In addition, the fate<\/a> of Nippon Steel\u2019s troubled effort to acquire U.S. Steel remained unknown. Japanese businesses<\/a> worried that the Biden administration\u2019s decision to block the purchase by a Japanese company due to \u201cnational security concerns\u201d suggested a departure from the close private-sector relationship between the two countries. Japan was, after all, a U.S. ally and one of the largest sources<\/a> of foreign direct investment in the United States. This was made clear in the press conference held by Ishiba and Trump after their meeting. So too was the Japanese willingness to purchase more LNG from the United States, an important energy priority for the Trump administration.<\/p>\n

But the early optimism of the Ishiba-Trump meeting soon began to fade. The tariff announcement on April 2 changed the tone and tenor of U.S.-Japan talks. Trump imposed<\/a> a reciprocal tariff of 24 percent on Japan, along with an additional 25 percent tariff on automobiles<\/a> and their parts, plus a 25 percent tariff on steel<\/a> and aluminum<\/a>. A ninety-day pause was given<\/a> on April 9 to allow countries to negotiate trade deals, and the Japanese government got to work on crafting a bilateral deal.\u00a0<\/p>\n

Trump\u2019s proposed tariffs would be disastrous for Japanese businesses. The Japan Business Federation, or Keidanren, expressed<\/a> serious concerns, noting that blanket tariffs could have \u201ca serious impact not only on Japan-U.S. economic relations but also on the global economy and the free trade system.\u201d Japan\u2019s auto industry would suffer the most. The Japan Automobile Manufacturers Association (JAMA) stated<\/a> that Japanese automakers have made significant contributions to the U.S. economy and that mutual trust should be preserved. Estimates from Toyota and Honda revealed stunning profit losses\u2014for the Japanese fiscal year 2026, Toyota forecasts<\/a> a 35 percent profit loss, while Honda forecasts<\/a> a 70 percent loss.<\/p>\n

On April 7, Ishiba told<\/a> Trump that his Minister in charge of Economic Revitalization, Akazawa Ryosei, would take the lead in negotiations with Washington. U.S.-Japan trade talks kicked<\/a> off on April 16, and President Trump himself welcomed Ishiba\u2019s delegate, presenting Akazawa with an autographed MAGA hat. Subsequent meetings with Secretary of the Treasury Scott Bessent and Secretary of Commerce Howard Ludwick seemed cordial enough. Yet the two sides struggled to align their goals. Akazawa eventually flew back and forth to Washington six times, hoping to conclude a deal before the G7 Summit in Canada on June 16.<\/p>\n

More on:<\/p>\n

\n Japan<\/a>\n <\/p>\n

\n Indo-Pacific<\/a>\n <\/p>\n

\n Elections and Voting<\/a>\n <\/p>\n

\n Tariffs<\/a>\n <\/p>\n

But Ishiba and Trump could not agree. Akazawa tried again at the end of the G7 with his U.S. counterparts to find a compromise, but the talks remained at an impasse. Ishiba made it clear<\/a> that he would not accept any deal that compromised Japanese interests. The ninety-day pause was due to end on July 9 with no deal in sight. On July 1, Trump claimed<\/a>, \u201cWe\u2019ve dealt with Japan. I\u2019m not sure we\u2019re going to make a deal. I doubt it with Japan. They\u2019re very tough. You have to understand they are very spoiled.\u201d<\/p>\n

No further negotiation\u2014and particularly no sudden capitulation\u2014was possible for Japan\u2019s prime minister. The campaign for the Upper House election had already begun on July 3. Ishiba\u2019s hope that Japan could find common ground with the Trump administration on a mutually beneficial deal was dashed. In a much-touted public letter<\/a>, Trump raised the stakes:<\/p>\n

\u201cOur relationship has been, unfortunately, far from Reciprocal. Starting from August 1, 2025, we will charge Japan a Tariff of only 25% on any and all Japanese products sent into the United States, separate from all Sectoral Tariffs. Goods transshipped to evade a higher Tariff will be subject to that higher Tariff\u2026\u201d<\/p>\n

Ishiba responded<\/a> on the campaign trail by declaring that this was now \u201ca battle for our national interest, and we will not be underestimated.\u201d<\/p>\n

Amid the trade impasse, the president has periodically noted that the strategic alliance between the U.S. and Japan is \u201cone-sided.\u201d At an April cabinet meeting, Trump noted<\/a> that the U.S. \u201cpays hundreds of billions of dollars to defend them (Japan), but…they don’t pay anything.\u201d Secretary of Defense Pete Hegseth also declared that the Trump administration wants its Indo-Pacific allies to raise<\/a> their defense spending to levels equal to the goals set by NATO allies in Europe, now 5 percent. Other DOD officials have specifically called for Japan to hike its military spending to 3 percent of its GDP, prompting Ishiba to push back<\/a>, stating that Japan will decide its own defense spending.<\/p>\n

Going into this weekend\u2019s election, Japanese voters are thinking mainly of their own economic worries. Those worries are likely to grow as the Japanese economy feels the effects of U.S. tariffs. Already, first-quarter economic data suggest<\/a> a 0.7 percent annual contraction for Japan\u2019s GDP, and a trade deficit<\/a> of $15 billion (2.2 trillion yen) has been recorded for the first six months of 2025. The economic stakes of the impasse with the United States are high\u2014and getting higher\u2014as Prime Minister Ishiba and his party battle for support at home.<\/p>\n","protected":false},"excerpt":{"rendered":"The stakes are unusually high in Sunday\u2019s Upper House election. Prime Minister Ishiba Shigeru leads a minority government,…\n","protected":false},"author":2,"featured_media":273759,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[103630,10406,2122,479,49,978,659],"class_list":{"0":"post-273758","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-elections-and-voting","9":"tag-indo-pacific","10":"tag-japan","11":"tag-tariffs","12":"tag-united-states","13":"tag-us","14":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114877909085597892","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/273758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=273758"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/273758\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/273759"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=273758"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=273758"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=273758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}