In yet another escalation within global trade negotiations, former U.S. President Donald Trump has threatened Japan with tariffs as high as 35%, accusing Tokyo of exploiting the United States and undermining trade balances. His statement, issued just three days before the scheduled imposition of increased tariffs on July 9th, triggered market unease, with the Nikkei 225 dropping by 0.6% and the yen weakening to 143.88 against the dollar.
Trump, speaking in strong tones, claimed that Japan is “spoiled” and should pay tariffs that reflect the U.S. deficit in bilateral trade. Analysts warn of a potential crisis that could lead to mutual trade countermeasures, while calls grow for the Japanese government to reconsider its so-called “calm and steady” approach thus far.
Japanese Prime Minister Shigeru Ishiba insists he will not accept a “bad deal,” prioritizing domestic employment ahead of the upper house elections on July 20. The Japanese side maintains that any agreement must be comprehensive, covering both general tariffs and targeted ones on automobiles, steel, and aluminum—key sectors for Japan, as the automotive industry contributes nearly 10% of GDP and employs 8% of the workforce.
However, former diplomats like Ichirō Fujisaki believe Japan has yet to bring anything “tangible” to the table to appease Washington. They suggest that Japan’s high-tech industry—especially in semiconductor materials, where the U.S. is significantly dependent—could serve as leverage.
According to Bloomberg, imposing tariffs of 30–35% could cause a medium-term contraction in Japan’s GDP by 1.2%, double the 0.6% impact from previously announced 24% tariffs. Some strategic analysts note that without a deal, the Nikkei index could slide to as low as 38,000 points—over 4% losses from current levels.
Despite the pressure, most analysts remain cautiously optimistic that a deal will eventually emerge, albeit with more concessions from Japan. As former ambassador Fujisaki aptly put it, the likely outcome would be a “big win” for the U.S. and a small one for Japan.