The ongoing US-Japan trade negotiations have hit a deadlock with no progress being made. As the deadline for the temporary suspension of equivalent tariffs on July 9 approaches, US President Trump expressed dissatisfaction on Monday (June 30) over Japan’s refusal to buy American rice, hinting at a potential end to the US-Japan trade talks.
In a post on “Truth Social” on Monday, Trump mentioned that some countries have been spoiled, stating, “I have great respect for Japan, they won’t accept our rice, but they are facing severe rice shortages.”
He went on to say that the US only needs to send a letter to Japan and that the US is willing to continue being trade partners with Japan in the future.
This “letter” refers to the tariff rate notification that Trump plans to send to all trading partners on July 9. The President mentioned in a TV interview with Fox News on Sunday that this letter will mark the “end of trade agreements (negotiations).” He told Fox News that these notification letters will state, “Congratulations, we allow you to shop in the United States, and you will pay a 25% tariff, or 35%, 50%, 10% tariff.”
Trump has criticized Japan for imposing high tariffs on rice.
Ryosei Akazawa, Japan’s chief tariff negotiator, returned to Tokyo from the US on Monday following the latest round of talks in Washington, which failed to reach an agreement on how to address the US trade deficit with Japan.
Akazawa met with US Secretary of Commerce Howard Lutnick for about an hour last Friday and had a brief phone conversation with him on Saturday.
On Sunday, Akazawa headed back to Tokyo, without meeting with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. Currently, negotiations at the working level between both parties will continue.
After landing at Haneda Airport in Tokyo, Akazawa told reporters, “We will continue to work diligently to reach an agreement beneficial to both Japan and the US while firmly maintaining our national interests.”
He then met with Japanese Prime Minister Shigeru Mune to update him on the progress of the negotiations.
The US-Japan trade negotiations have been stuck as the Trump administration demands Japan to immediately reduce the trade imbalance with the US. Japan has proposed cooperation in areas such as shipbuilding and aviation, but these projects may not swiftly reduce the US trade deficit.
During the Fox News interview on Sunday, Trump also expressed his dissatisfaction with the US trade deficit with Japan.
“We don’t export cars to Japan, and they won’t accept our cars, but we import millions of their cars to the US,” said Trump. “It’s unfair.”
Since Trump 1.0, there has been no significant change in the US trade deficit with Japan. Trump urged Japan to increase imports of crude oil and other American goods immediately to eliminate the trade imbalance.
However, Japan insists that increasing US imports must be accompanied by exemptions for tariffs on cars and other products. But the Trump administration is unwilling to negotiate tariffs on specific industries such as cars, steel, and aluminum.
During the Fox News interview, Trump stated that Japan will continue to be subject to the current 25% tariff on cars.
The Japanese side emphasized Japan’s contribution to the US economy and called for a reassessment of tariffs. “Japanese manufacturers produce 300,000 cars annually in the US and export them,” said Akazawa.
Japan also proposed cooperation with the US in rare earth supply in response to China’s temporary export restrictions. However, such proposals did not resonate with the Trump administration.
The US once again pressured Japan to increase imports of agricultural products and oil, while also demanding Japan to lower tariffs on agricultural products.
However, the current government under Shigeru Mune is in a sensitive period, with Japan’s upcoming Upper House elections. The shortage of rice and the high price of rice have become the top concerns for Japanese voters. Despite releasing rice reserves thrice since March, the government’s efforts have had minimal impact.
For decades, Japan has strictly limited the importation of rice in the name of protecting the interests of farmers. Prior to joining the World Trade Organization in 1995, Japan imposed tariffs as high as 778% on imported rice, gradually reducing to the current 227% after joining the WTO.
If the importation of rice becomes a reality, it signifies a potential shake-up in the position of rice as Japan’s stable staple food.
(This article referenced reports from Nikkei Asia News)