Japan’s chief trade negotiator, Ryosei Akazawa, called for a review of US tariffs as he left for Washington on June 5, 2025.

This meeting may be the last ministerial-level discussion before the Group of Seven (G-7) leaders’ summit in Canada.

Akazawa highlighted Japan’s request for the US to reconsider its tariff measures, including a recent increase on steel and aluminum tariffs to 50%.

He mentioned that Japan is assessing the economic impact of this tariff increase and will respond based on its findings.

This round of trade negotiations marks the fifth meeting between Japan and the US. Akazawa expressed uncertainty about which US officials he will meet.

He is expected to return to Japan on June 1, 2025, just before the G-7 summit, where Japanese Prime Minister Shigeru Ishiba and US President Donald Trump are scheduled to meet.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Japan’s defensive economic playbook echoes historical responses to US tariffs

Japan’s approach to the current tariff standoff follows a pattern established decades ago during similar trade tensions.

When faced with a 10% universal tariff in the 1970s, Japan chose not to retaliate but instead focused on domestic policy adjustments to mitigate economic impacts, similar to its current strategy 1.

The newly approved $6.3 billion spending package to support businesses affected by US tariffs demonstrates Japan’s preference for internal economic stabilization over retaliatory measures 2.

Toyota’s projected $1.3 billion profit hit illustrates the significant stakes for Japan’s economy, with automotive exports historically being a central point of trade friction since the 1970s and 1980s 2.

Bank of Japan Governor Kazuo Ueda’s confidence that the economy can withstand tariff impacts reveals Japan’s strategic calculation that its strong corporate profits provide sufficient buffer against short-term trade disruptions 3.

2️⃣ Economic consequences of tariffs stretch far beyond negotiating tables

The current US average effective tariff rate of 17.8% represents the highest level since 1934, creating ripple effects throughout both economies 4.

Economic projections indicate US real GDP growth could decline by 0.7 percentage points due to tariff policies, with a potential reduction of 456,000 payroll jobs by the end of 2025 4.

For Japan, economists warn that growth rates could be halved, threatening jobs and profits across the automotive supply chain, which explains the urgency in Minister Akazawa’s negotiations 2.

The doubling of steel and aluminum tariffs to 50% this week specifically heightens pressure on Japan’s industrial sector, which has historically been vital to US-Japan trade relations 5.

These concrete economic stakes explain why both sides are closely analyzing impacts before the G-7 meeting, where Prime Minister Ishiba and President Trump are expected to potentially announce a trade agreement.

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