Trade negotiations begin this week, Japan is trying to push the US to completely abolish tariffs

The Zhitong Finance App learned that according to Japan's top trade representative Ryosei Akazawa, Japan will strive to achieve results as soon as possible in the US-Japan tariff negotiations that will begin soon. According to reports, Japan will continue to seek the complete cancellation of all additional tariffs already imposed and threatened to be imposed by the Trump administration. Japan's chief negotiator will visit Washington from April 16 to 18 to begin formal talks with US Treasury Secretary Scott Bessent and US Trade Representative Jamison Greer.

“Frankly speaking, our business' profits are constantly being eaten away by tariffs over time,” Akazawa said. He said, “I know this is not an easy task, but all departments of the government will work together to achieve the results of the negotiations as soon as possible. This is the most important task at present.” “Our goal is for the US to completely eliminate additional tariffs.”

Akazawa's remarks highlighted the urgency of the situation. Japanese Prime Minister Ishiwari Shigeru described the current situation as a national crisis. Japan was one of the first countries to begin negotiations with the US after President Trump abruptly suspended reciprocal tariffs last week.

Japan has a large trade surplus with the US. As a long-term ally of the US, its exports to the US are subject to 24% tariffs. Although these tariffs have been suspended for 90 days, like most full-scale “reciprocal” tariffs imposed by Trump, a general 10% tax rate and a 25% tariff on automobiles remain in place, and the latter is expected to have a particularly severe impact on Japan. The US is Japan's largest export destination, and automobile exports account for about 28% of Japan's exports to the US.

Ryosei Akazawa also mentioned that Japan hopes to understand America's real demands and use its position as America's largest investor to achieve a “win-win” by expanding Japan's investment in the US, rather than through tariffs. However, he did not disclose further strategic details of Japan's participation in this negotiation or a possible time frame for reaching an agreement.

Akazawa said, “For negotiations, it's important to understand the other party's negotiation ideas. At least now we have entered a new phase, and negotiations between key leaders of the two sides are about to begin.”

Tariffs jeopardize the economy

According to a survey released by the Japan Center for Economic Research last week, most economists expect that the tariffs imposed by Trump will reduce Japan's economic growth by 0.6 percentage points in the current fiscal year ending March 2026.

Market turmoil caused by Trump's imposition of tariffs may also cool down business confidence and disrupt the cycle of rising wages and prices. Meanwhile, the Bank of Japan believes that this upward cycle is a prerequisite for it to normalize the ultra-loose policy.

The global stock market, foreign exchange market, and bond market fluctuated greatly due to Trump's repeated statements on the tariff issue. Some analysts believe that the recent sharp decline in US Treasury bonds and the US dollar indicates that the market is losing confidence in the safe-haven position of US assets.

A senior Bank of Japan official downplayed the possibility that the global market would fall into a dangerous “cash rush” situation.

Akio Okuno, head of the Bank of Japan's monetary affairs department, said on Tuesday: “Unlike during the global financial crisis, we have not seen a sharp decline in short-term liquidity so far.”

However, analysts pointed out that there is uncertainty about the impact of Trump's policies, which may cause the Bank of Japan to keep interest rates unchanged for a period of time, including at the next policy meeting from April 30 to May 1.

Given Japan's heavy reliance on the US market, this negotiation is critical for Japan. The negotiations are expected to cover tariffs, non-tariff barriers, and difficult exchange rate issues.

Currency issues

Some analysts said that the recent rebound in the yen was mainly driven by the general depreciation of the US dollar, which may also ease potential pressure from the US to require Japan to support the exchange rate of the yen against the US dollar in order to enhance the competitiveness of US exports.

The Tokyo side has been trying to separate the difficult exchange rate issue from direct trade negotiations and leave it to the finance ministers of the two countries for discussion.

Japan's Finance Minister Katsushin Kato said that he is making arrangements to go to Washington next week to attend the spring meetings of the International Monetary Fund and the World Bank, during which time he may meet with Bennett.

Akazawa pointed out that the US side may want to discuss foreign exchange issues in trade negotiations, but Japan is more inclined to have in-depth discussions between Bezent and Japanese Finance Minister Katsunobu Kato on this issue. In Japan, the Ministry of Finance is responsible for formulating monetary policy.

Katsunobu Kato said in parliament on Tuesday that both Japan and the US believe that the exchange rate should be determined by the market, and that excessive and disorderly exchange rate fluctuations will adversely affect economic and financial stability.

He also said, “I hope to continue dialogue with the United States based on this consensus.”