Catenaa, Wednesday, July 03, 2025- US President Donald Trump warned that Japan should pay up to 35% tariffs on US exports as tension between the two nations ramped up for a third straight day.
Japan should be forced to “pay 30%, 35% or whatever the number is that we determine, because we also have a very big trade deficit with Japan,” Trump said on Wednesday, again flagging the possibility that across-the-board tariffs could go much higher than the 24% initially penciled in for July 9.
“I’m not sure we’re going to make a deal. I doubt it with Japan, they’re very tough. You have to understand, they’re very spoiled,” he said.
Trump’s latest threat fits in with a high-pressure deal-making strategy that sometimes results in big last-minute concessions on both sides, as seen with China, but market players still need to game out how to position themselves should talks founder.
Japan has so far stood firm in negotiations over across-the-board reciprocal tariffs, insisting that they be removed along with additional sectoral tariffs on autos, steel and aluminium. The car duties are particularly painful for Japan as the industry contributes the equivalent of almost 10% of gross domestic product and employs around 8% of the workforce.
Tokyo has insisted that a “win-win” deal must encompass all the tariffs in one go, with Ishiba preferring no deal to a bad deal ahead of a July 20 upper house election.
The Prime Minister on Wednesday reiterated his view that focusing on jobs and investment in the US was the way forward, just like it was for Nippon Steel as it patiently sought to change Trump’s view and take over US Steel.
“Japan is the biggest global investor in the US and the world’s biggest contributor to US jobs,” Ishiba said in Tokyo on Wednesday. “That means Japan is different from other countries.”
But as July 9 gets closer, some observers say more needs to be done to convince the US to back off.
