The United States has declined Japan’s request for a complete exemption from both a 10% general “reciprocal” tariff and a country-specific tariff in recent trade discussions, according to sources familiar with the talks on Monday.
During a meeting in Washington last week, U.S. officials—including Treasury Secretary Scott Bessent—told Japan’s chief negotiator, Ryosei Akazawa, that the Biden administration is only willing to discuss a possible reduction of the 14% country-specific tariff, which is currently paused until early July. Full exemption, they made clear, is off the table for now.
According to the sources, American negotiators emphasized during the second round of talks that any extension of the 90-day suspension—or any cut to the 14% tariff—will depend on how the negotiations progress.
A government photo shows Japan’s economic revitalization minister Ryosei Akazawa (front left) meeting with U.S. President Donald Trump (far right) in Washington on April 16, 2025. (Kyodo)
Tokyo has pushed for a complete rollback of the reciprocal tariffs, which include an additional 25% duty on automobiles and another 25% on steel and aluminum. Japanese officials have argued that their investments and job creation efforts in the U.S. warrant relief from these penalties.
However, Washington has reiterated that it will not entertain negotiations over the global 10% base tariff or levies on automobiles and metals.
Japan is among the first countries to begin formal talks with the U.S. over its broader set of import tariffs.
As of Saturday, the U.S. also implemented a new 25% surcharge on critical auto components like engines and transmissions. Some temporary exemptions will be available for up to two years.
Japanese Finance Minister Katsunobu Kato speaks at a press briefing after a meeting of ASEAN+3 finance ministers in Milan on May 4, 2025. (Kyodo)
President Trump appears to be pressing Japan to further liberalize its auto and agricultural markets. Sources say that in the initial round of talks in mid-April, U.S. officials expressed frustration at the limited number of American-made cars being sold in Japan and urged Tokyo to import more U.S. agricultural goods.
At a press conference in Milan on Sunday, Finance Minister Katsunobu Kato addressed speculation about Japan’s strategy, stating that the government is not considering using its large holdings of U.S. Treasury bonds as leverage in trade negotiations.
Kato’s comments came just days after he hinted in a televised interview that Tokyo might use its U.S. debt holdings as a bargaining tool. Japan, alongside China, is one of the largest foreign holders of U.S. Treasurys.
The idea gained traction after sell-offs in U.S. bonds, stocks, and the dollar earlier in April, sparked by investor unease over President Trump’s increasingly aggressive tariff agenda.
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