U.S. trade officials have put forward a plan for a new trade agreement with Japan, according to Nikkei News. The proposal focuses on keeping tariffs—taxes on imported goods—unchanged for key industries like cars, steel, and aluminum. This means the U.S. is not willing to reduce these tariffs, which has caused tension with Japanese negotiators.
Japan’s team strongly disagrees with the U.S. approach, as reported by Nikkei. They believe that talks to address the U.S. trade deficit—the gap between what the U.S. buys from and sells to Japan—will be challenging unless tariffs on autos, steel, and aluminum are open for discussion. Japan insists these industries must be part of the negotiations for progress to be made.
The U.S. plan also emphasizes “reciprocal tariffs,” meaning both countries would apply similar tariff rates to each other’s goods. However, Japan’s firm stance against the U.S. proposal suggests that reaching an agreement may be difficult without compromises on both sides.
Japan’s Finance Minister, Katsunobu Kato, has hinted that the country’s large investment in US government bonds might be used as leverage in trade talks with the United States.
During a TV Tokyo program on Friday, Kato was asked if Japan’s decision to hold on to its US Treasury assets could serve as a strategy in negotiations. He replied, “It can be considered a bargaining tool,” adding that the final decision on whether to actually use it remains uncertain.
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