Japan faces difficulties in striking a trade deal with the United States before the new deadline imposed by U.S. President Donald Trump, due partly to the ongoing Upper House election campaign.
Prime Minister Shigeru Ishiba took Trump’s letter threatening a new unilateral tariff in stride on July 8.
“We have made some progress through rounds of negotiations,” Ishiba told a hastily assembled meeting of all Cabinet ministers. “As a result, (the tariff rate) has been effectively left unchanged and the deadline for talks has been extended.”
In a letter released on his social media platform on July 7, Trump said Japan will face a 25 percent tariff come Aug. 1. The rate is 1 point higher than the one announced in April.
Trump paused this “Liberation Day” tariff for 90 days until July 9, excluding the baseline portion of 10 percent, and Tokyo has been negotiating with Washington to review new U.S. tariffs.
Ryosei Akazawa, Ishiba’s right-hand man, who is representing Japan in the tariff negotiations with the United States, said the government is putting all its energy in combatting Trump’s tariffs.
“We have yet to reach an agreement (with the United States) because we have not given ground on what we cannot to protect the national interest,” he said in an Upper House election campaign speech on July 8. “(The United States decided) to go overtime with Japan.”
Akazawa, minister in charge of economic revitalization, agreed with U.S. Commerce Secretary Howard Lutnick to continue negotiations during an approximately 40-minute phone conversation earlier in the day.
A senior ministry official in charge of economic affairs said the government will analyze what the United States considered insufficient in a package of proposals Japan has presented.
But it appears difficult for the government to come up with additional incentives, at least until the Upper House election is held on July 20.
A government official also said Ishiba will be unable to do anything to display his leadership in the 10 days from the election to the new Aug. 1 deadline.
Japan has put a top priority on a review of a sectoral tariff of an additional 25 percent on automobiles, which account for about 30 percent of its exports to the United States by value.
Tokyo proposed a mechanism that would lower the tariff rate in accordance with the country’s contribution to the U.S. auto industry.
At one point, government officials expected that Ishiba and Trump could clinch an agreement, in principle, on a trade deal in mid-June, but Ishiba emerged empty-handed after he met with the U.S. president on the sidelines of a Group of Seven summit in Canada on June 16.
Ishiba had hoped that he could impress voters during the Upper House election campaign if tariff negotiations had been concluded in early July, when official campaigning started.
Opinion polls by media outlets have shown that the ruling coalition of his Liberal Democratic Party and Komeito could lose a majority in the election, in which half of the chamber’s 248 seats are up for re-election.
Trump’s letter could deliver an additional blow to the coalition, which lost its majority in the Lower House election in October.
Ishiba has taken advantage of tariff negotiations with the United States to stifle criticism of the government by seeking cooperation on the issue from opposition parties.
But his responsibility has now been called into question for being unable to resolve the negotiations.
Yoshihiko Noda, president of the main opposition Constitutional Democratic Party of Japan, has urged Ishiba to engage with Trump one on one.
“As the prime minister, are you properly undertaking leader-to-leader diplomacy? You are being too slow to act, aren’t you?” he asked during a campaign speech on July 8.
Noda, a former prime minister, referred to his decision in June not to submit a no-confidence motion against the Cabinet toward the end of the ordinary Diet session.
“We expected that you would conduct Japan-U.S. negotiations thoroughly in times of a national crisis,” Noda said. “If you are not, we must take over (the government).”
AloJapan.com