PM Shigeru Ishiba speaks to reporters on August 7, denying any discrepancies between Japan and the US over the newly imposed Trump tariffs. (©Naka Haruna)
As President Donald Trump's new reciprocal tariffs took effect on August 7, concern mounted in Japan over what some saw as a departure from the terms of a recent trade deal.
Under the July 23 agreement, all Japanese imports to the US will face a baseline tariff of 15%, with certain sector-specific exceptions.
But the agreement does not mention a "no-stacking clause," meaning that, in theory, multiple tariffs could be applied cumulatively on top of existing tariffs.
Tariff Terms Disputed
An executive order signed by Trump on July 31 and a Federal Register notice published August 6 have fueled suspicions that a no-stacking clause was applied to the European Union but excluded Japan, despite both reaching a similar deal with Washington.
If Japanese exports are subject to an additional 15% tariff on top of existing duties, some products could see a sharp price increase in the US market.
According to some reports, Japanese textiles previously taxed at 7.5% could be hit with a combined rate of 22.5%. Tariffs on Japanese beef may rise as high as 41.4%.
A separate accord to reduce tariffs on Japanese automobiles from 27.5% to 15% also remains unimplemented. Though both governments announced their commitment, no detailed timeline has been set.
Relief for Now
Seeking clarity, Ryosei Akazawa, Tokyo's chief trade negotiator, is visiting Washington.
After meeting with US counterparts on Thursday, Akazawa said the American side had promised to amend the executive order affecting Japan so the reciprocal tariffs would not be stacked, and that any tariffs paid above 15% would be refunded retroactively, according to media reports.
The latest dispute has also highlighted broader tensions, including differing perspectives on Japan's $550 billion USD investment in the US. While the White House characterized the funds as "our money," Tokyo stressed that these investments must ultimately serve the interests of the Japanese economy.
It remains unclear whether the latest talks covered investment issues and the implementation of reduced auto tariffs.
Tokyo Faces Blowback
Back home, criticism is growing over the Shigeru Ishiba government's failure to secure a formal written agreement, leaving it vulnerable to contradictory interpretations.
"Even written agreements can be subject to different interpretations," said Long Ke, an economist and senior fellow at the Tokyo Foundation. "But if everything was based on verbal concessions, misunderstandings were almost inevitable."
The recent episode has likewise raised doubts about the Japanese government's handling of relations with Washington amid the increasingly unpredictable diplomacy of the Trump era.
Prime Minister Ishiba is already under pressure to step down after his party's crushing defeat in the July Upper House election. A drawn-out tariff standoff could further sharpen those calls.
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Author: Kenji Yoshida
