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Donald Trump has issued a threat to increase tariffs on Japan and has cast doubt on the possibility of reaching a trade deal with the US’s Asian ally. This comes as he ramps up his trade rhetoric just days before a temporary pause on certain steep tariffs is set to expire.
The US president has indicated that new tariffs will be imposed on countries that fail to reach a trade agreement by July 9, when the reciprocal tariffs put in place in April are scheduled to resume.
In particular, Trump has targeted Tokyo, a key trading partner that had initially sought a deal with the US following the global trade war that was initiated in April.
During a recent statement, Trump expressed skepticism about the likelihood of reaching a deal with Japan, stating, “I doubt it.” He mentioned the possibility of implementing a 30-35% tariff on Japanese imports due to the significant trade deficit.
These remarks suggest that Trump is prepared to take a tough stance in negotiations with trading partners, despite backing down on higher global tariffs earlier this year amid market instability.
On April 2, the US imposed a 24% tariff on all imports from Japan before temporarily reducing it to 10% for 90 days to facilitate negotiations.
The looming threat of increased tariffs on Japan, the world’s fourth-largest economy, raises concerns about the potential reignition of a global trade war if agreements are not reached by Trump’s deadline next week.
Trump has also indicated that he does not intend to extend the deadline for negotiations beyond next week. Despite announcing a 90-day pause to reciprocal tariffs in April, only the UK has managed to secure a new trade deal with the US.
Accusing Japan of being “spoiled,” Trump has criticized the country for not committing to purchasing more American rice or allowing US-manufactured cars into its market. Current tariffs on Japanese exports to the US range from 10% to 50% for different products.
Trade officials from the US and Japan have been engaged in intense negotiations in recent months. Japan is reportedly coming to terms with the likelihood of not being exempt from automotive tariffs but is seeking assurances that any deal reached will be final.
Market reactions in Japan and the US have been mixed as a result of these developments, with Japanese markets experiencing declines and US stocks closing lower. The yen also saw a slight decrease against the dollar.
Additional reporting by George Steer in New York and William Sandlund in Hong Kong