The Fragile Alliance

A Fundamental Gap Opens in Tariff Negotiations


By Takuya Nishimura, APP Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun. The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
May 5, 2025. Special to Asia Policy Point

As tariff talks between the United States and Japan are getting into details, a fundamental difference over preconditions has emerged that put the talks in danger. While the U.S. says that cars, steel, and aluminum tariffs are nonnegotiable, Japan insists on negotiating tariffs on every product from Japan. This disagreement places unusual pressure on both governments due to internal political calendars.

Following the first meeting on April 16, Japan’s top negotiator, Ryosei Akazawa, held a second meeting with his counterparts, U.S. Secretary of Treasury Scott Bessent, Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer, in Washington, DC on May 1.

After the meeting, Akazawa announced that both sides had discussed expanding trade between the two countries, reducing non-tariff barriers, and cooperating on economic security. Japan asked the U.S. to reconsider its tariff policy on all products.

According to some news reports, Japan explained in the meeting how it would increase imports of corn and soybeans from the U.S. and ease regulations that generally prevent the importation of foreign-made cars. Bessent said that he hoped to reach a consensus with Japan across a range of key bilateral issues soon.

However, even before Akazawa returned to Japan, Japanese news media reported that the U.S. would exclude cars, steel, and aluminum from the negotiations. The Trump administration had already activated 25 percent tariffs on steel and aluminum in March and imposed a 25 percent duty on automobiles in early April.

The “reciprocal” tariffs that Trump announced in April are different from the 25 percent tariffs. The administration set a 10 percent baseline tariff on all imports into the U.S. and separate tariffs for each country. The baseline tariff took effect on April 5, but Trump set 90-day moratorium on the additional tariffs; the moratorium will expire on July 9. The tariffs on cars, steel, and aluminum are in a third category.

The rate of reciprocal tariffs on Japanese imports, the sum of the 10 percent baseline tariff and an additional 14 percent tariff, is 24 percent. The U.S. team told Akazawa that they would negotiate only the additional 14 percent tariff. In addition, the U.S. would not negotiate the 10 percent baseline with any country.

As soon as he returned to Japan, Akazawa reported to Prime Minister Shigeru Ishiba about the results of the meeting. Akazawa announced Japan’s position that tariffs on all goods should be negotiated. “We cannot reach an agreement without those items (cars, steel, and aluminum),” said Akazawa to the reporters. He added that he did not have parameters for an agreement with the U.S.

Notwithstanding the differences between the two governments, officials on both sides have continued to negotiate after Akazawa’s second visit. A third meeting at the ministerial level is anticipated in mid-May. Both sides understand the importance of reaching a deal before the 90-day moratorium expires.

The schedule is closely aligned with the domestic politics of each side. Ishiba does not want the negotiations to have a negative impact on elections to the Upper House in July. The leaders in Liberal Democratic Party (LDP) are worried about protests by farmers against any compromise on imports of agricultural products from the U.S. LDP leaders are aware of the importance of protecting the national interest in the tariff negotiations.

Opposition leaders are putting pressure on Ishiba not to make easy concessions. “It is important to keep a motivation for an early agreement, but Japan should not open its hand too early to be taken advantage of by the U.S.,” said the leader of the Constitutional Democratic Party of Japan, Yoshihiko Noda.

Concerns are growing about a slowdown in the Japanese economy. In a monetary policy meeting on the same day as the Akazawa-Bessent meeting, the Bank of Japan reduced its projection of Japan’s economic growth in FY2025 by more than 50 percent from the original 1.1 percent in January to 0.5 percent. Japan has no time to waste on tariff negotiations.

Trump has indicated that a deal with Japan is a priority that will set a level for negotiations with other countries. Along with progress in negotiations with Japan, Secretary of State Marco Rubio said that tariff talks with China would start soon. As approval ratings for President Trump are declining, Trump may believe that a negotiated deal with Japan will be a signal achievement in the MAGA agenda.

There is an expectation in Japan that the two sides may be able to make more progress when Trump and Ishiba are together at the G7 Summit in Canada on May 15 to 17. Ishiba spoke by telephone with Canadian Prime Minister Mark Carney, who had just been elected prime minister, to discuss the impact of Trump’s tariffs on the world economy and the multilateral trade framework. Although Ishiba’s G7 schedule does not yet include a side meeting with Trump, an agreement, even if it is only partial, between the leaders in June is the best hope for both Japan and the U.S.

JAPAN'S TARIFF NEGOTIATOR

Ryosei AKAZAWA [赤澤 亮正]

 We are not considering sacrificing Japan's agriculture, 

forestry and fisheries industries for the sake of automobiles. 

Ryosei AKAZAWA (赤澤 亮正), 64
MINISTER IN CHARGE OF ECONOMIC REVITALIZATION
7 terms in House of Representatives (Tottori 2). LDP

Also under current government his portfolios are:
Minister in charge of New Capitalism
Minister in charge of Wage Increase
Minister in charge of Startups
Minister in charge of Social Security Reform
Minister in charge of Infectious Disease Crisis Management
Minister in charge of the Preparation of Establishing the Disaster Management Agency
Minister of State for Economic and Fiscal Policy
 
He is in charge of establishing a Disaster Prevention Agency, which is a pet project of Prime Minister Ishiba.
 
Past Positions: State Minister in charge of Financial Services Agency (2nd Kishida Cabinet (2nd Reshuffled))
Parliamentary Secretary for Land, Infrastructure and Transport (2nd Abe Cabinet)
 
University of Tokyo (1984)
Upon graduation joined the Ministry of Transportation (today’s Ministry of Land, Infrastructure, Transport and Tourism)
Johnson Graduate School of Management, Cornell University, MBA (1991)

Returned to Ministry after Cornell. Among his early assignments was to oversee the Sasakawa organization-funded Nippon Foundation. (The Sasakawa organization manages motorboat racing (gambling) in Japan, is closely involved in the shipbuilding and harbor management industries in Japan, and funds many philanthropic groups. Its founder, Ryōichi Sasakawa [笹川 良], a Class-A war criminal, was involved in all manner of illicit activities during and after the war.)

Retired from government in 2005.
 
One of “Koizumi’s Children/Assassins” who won election to the Lower House for the first time in the 2005 “postal reform election”
One of the 20 nominators for Ishiba in 2024 LDP presidential election
Although he was a lawmaker supported by Junichiro Koizumi, he became an ally of Ishiba and was elected from the same prefecture, Tottori
Often referred to as an “Ishiba Mania.” His continued support of Ishiba alienated him from mainstream politicians like Abe, Suga, and Kishida

Served as secretary general of Ishiba's campaign in the 2024 LDP presidential election

While at the Ministry of Transportation, Akazawa managed the government’s disaster responses of the crash of Japan Air Lines Flight 123 (1985) and of the Hanshin-Awaji Great Earthquake (1995). This work made him an expert on and advocate for disaster management policies. He is now in charge of establishes a Disaster Prevention Agency.
 
It is reported that he learned American-style negotiation skills while at Cornell University’s business school. At the Ministry of Transport in 1994, he was Assistant Director, International Aviation Division, Supervision Department, Civil Aviation Bureau in charge of Japan-U.S. aviation negotiations.
 
In the 2005 election, then Prime Minister Koizumi dropped some lawmakers against his postal reform from the LDP slate and fielded “snipers” to their districts as official LDP candidates. Akazawa was one of those new lawmakers who defeated the anti-Koizumi candidates. As a lawmaker from a rural community, Akazawa shared decentralization policies with Ishiba for years and became a close ally in Ishiba faction, named Suigetsu-kai.
 
Akazawa is considered the cabinet minister most trusted by Prime Minister Ishiba. Although Akazawa has limited experience with trade negotiations, it is reasonable to assume for Ishiba to pick the Minister in charge of Economic Revitalization, because Toshimitsu Motegi, dubbed as “tough negotiator” by Trump, held the same position in the negotiations over Japan-U.S. Trade Agreement in 2019. Akazawa’s success in tariff negotiations depends on how well the Ministries for Foreign Affairs (MOFA) and Economy, Trade and Industry (METI) support him.

Family
Akazawa's birth name was Mori. His father was a university professor who encouraged him to pursue public service. When he started the University of Tokyo, he was adopted by his maternal grandparents. His maternal grandfather, Masamichi Akazawa [赤沢正道], was a politician and chairman of the construction company Akazawa Gumi [赤沢組] likely founded in 1915 by his great grandfather, Kohei Akazawa, a samurai from the Tokushima Domain who became an engineer and construction worker.

Akazawa’s wife: Chiaki Akazawa, born in Hokkaido. They met while he was working for Hokkaido Prefectural Government between 1996 and 1998, dispatched from the Ministry of Transport. Akazawa son; Ryota Akazawa, 24 years old. He was known as the leader of the cheering squad in Yonago Higashi High School in Tottori. Both Chiaki and Ryota were involved in the 2024 election campaign 

On his personal website, he prominently features his grandfather Masamichi Akazawa, former Minister of Home Affairs (today’s Minister of Internal Affairs and Communications) in the third Ikeda cabinet (1964) and the first reshuffled cabinet of the second Sato cabinet (1967). Akazawa says he wants to emulate his grandfather's principled way of life.

Conservative Nationalist Parliamentary League: Yasukuni, Association for Protecting National Interests in TPP Negotiations. Unification Church ties.

 
Social Media
Official Page: https://www.ryosei-akazawa.com/
Facebook: https://www.facebook.com/akazawa.ryosei/
Instagram: https://www.instagram.com/akazawa_ryosei/
Twitter: https://x.com/ryosei_akazawa
 
Book
Preparation Acts for Terrorism: How to Confront the Imminent Threat – 38 Key Debates in the National Diet [テロ等準備罪：目の前にある危機にいかに立ち向かうか 国会38の論点] by Ryosei Akazawa, Minister of State for Economic and Fiscal Policy, Liberal Democratic Party, Member of House of Representative, Good Books, Tokyo. November 15, 2017, 280 pages.
Book description:
     The passage of the 2017 legislation on the Punishment of the Preparation of Acts of Terrorism and Other Organized Crimes faced backlash from opposition parties and the media, primarily from the perspectives of privacy and human rights protection. According to the author, “the crux of this legislation is to strike an optimal balance between countering the threats of terrorism and organized crime and protecting privacy and human rights.” This book outlines Japan’s vulnerability to terrorism and organized crime prior to the legislation, and argues that, despite media criticism, the law remains restrained in key areas of enforcement compared to international standards.

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Bending toward Trump

Ishiba Hopes to Make a Model for Dealing with Trump

By Takuya Nishimura, APP Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun

The views expressed by the author are his own and are not associated with The Hokkaido Shimbun. You can find his blog, J Update here.
April 28, 2025. Special to Asia Policy Point

The Japanese government under Prime Minister Shigeru Ishiba is accelerating its efforts to deal with U.S. President Donald Trump’s shifting tariff policies. The negotiating team for a new trade deal with the U.S. is considering increasing imports of some agricultural products from the U.S. as a bargaining chip. The ultimate objective is to protect Japan’s citizens from the harm of Trump’s unpredictability. Ishiba, focused on this summer’s Upper House elections, hopes to demonstrate that he is a good model in the world for negotiating with the Trump administration.
 
In the team’s first meeting at the White House in mid-April, Japan’s top negotiator, Ryosei Akazawa, expressed Japan’s “extreme regret” about Trump’s tariffs. Both sides agreed to try to conclude talks as soon as possible.
 
Trump, who unexpectedly jumped into the bilateral meeting, left the Japanese confused. It was reported that he said that no American cars are being driven in Japan owing to excessive safety standards there. “Most victims in traffic accidents in Japan are pedestrians. Drivers [are the primary victims] in the U.S. That is why regulations on safety are different between Japan and the U.S. We need to understand that background,” said Ishiba in a Diet discussion.
 
After the meeting, Trump repeated an allegation from his first term that Japan’s safety standards include a “bowling ball test.” That is, the Japanese test the durability of foreign cars by dropping bowling balls on them – a test any automobile would be likely to fail. However, there is no such test. The Japanese people now have an image of its supposed trade partner making unrealistic arguments based on fake information.
 
As soon as he returned to Japan, Akazawa reported to Ishiba his impression of the Trump administration’s trade issues. Although Akazawa was careful not to show Japan’s hands, his team believes that Trump’s top priority in trading with Japan is the elimination of non-tariff barriers. “It can be making a model in the world for us to promote negotiation maintaining a good relationship.,” said Ishiba in a Diet discussion.
 
The Ishiba administration has started to consider easing regulations on imported cars from the U.S. Japan currently requires U.S. cars to obtain a safety certification in Japan, even if they have passed U.S. safety tests. The Japanese government is trying to determine whether it is possible to have common test specifications in Japan and the U.S. The Japan team is also looking for examples of Japanese carmakers increasing production in the U.S.
 
In the meeting with Akazawa’s team, the U.S. team showed a particular interest in agricultural exports to Japan, quoting a report on trade barriers by the U.S. Trade Representative. The Ishiba administration is now looking for ways to allow more U.S. farm products into the country. The Secretary General of the Liberal Democratic Party (LDP), Hiroshi Moriyama, estimated that Japanese demand for soybeans and corn would support more imports from America. There is an argument to increase rice import from the U.S., but the Japanese government can expect stiff opposition to increased rice imports from lawmakers who represent farmers.
 
Trump had expressed his frustration with Japan over currency valuation and security, but these matters have low priority. The U.S. Secretary of the Treasury, Scott Bessent, ruled out setting currency targets in negotiations with Japan. The Minister of Finance, Katsunobu Kato, met with Bessent in Washington, DC, and reported that they did not talk about a currency valuation target. It is worth noting that over the past two months the U.S. dollar has lost over 10 percent of its value against the Japanese yen, which may explain the U.S. willingness to forgo discussion of the issue.   
 
Regarding security, Asahi Shimbun reported that Trump told the Norwegian Prime Minister that military issues (including the level of national expenditures) would not be the subject of any trade deals.
 
In preparing for an accelerated deal that would place Japan at or near the top of nations willing to do business with the Trump administration, Ishiba must deliver domestic relief to mitigate the economic costs to the Japanese people. The urgent policy package developed by the officials assigned to deal with U.S. tariff policy includes provisions for enhancement of consultation for business sectors, financial support for entrepreneurs, sustainable employment and training, stimulation of consumption, including a subsidy of 10 yen per litter for gasoline, and structural reform of industries.
 
Ishiba ruled out cash distributions as part of a stimulus package. Instead, the parties are discussing a consumption tax cut. Komeito, the LDP’s coalition partner, wants to cut the consumption tax on food. Rank-and-file LDP lawmakers in the Upper House have asked for a two-year moratorium on the consumption tax for food, but LDP leaders oppose it.
 
The leader of the Constitutional Democratic Party of Japan, Yoshihiko Noda, who, as prime minister in 2012, is responsible for raising the consumption tax rate from 5 percent to 10 percent, has said that the CDP will support a one-year moratorium on the consumption tax for foods. This is one of the planks in the CDP’s platform for the coming Upper House election. Other opposition parties also have called for cutting or abolishing the consumption tax.
 
In resolving the U.S. tariff problem, Ishiba must weigh two domestic considerations.  First, of course, Ishiba must make tough decisions to defend the Japanese economy. Second, Trump’s tariffs distract the public’s attention away from political scandals and the weakness of the LDP’s minority government. Recent polls show at most only a slight rise in the Ishiba Cabinet’s approval ratings. In the end, Ishiba must present himself to Japanese voters as a leader who can deal wisely with the erratic Trump administration.

Ishiba Confronts Trumps Tariffs

Ishiba Builds His Team on Tariffs


By Takuya Nishimura, APP Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
April 14, 2025. Special to Asia Policy Point

After the FY2025 budget was approved on March 31, Japan’s Prime Minister Shigeru Ishiba turned to dealing with the Trump Administration tariffs. While Ishiba has been organizing his negotiating team, the opposition parties have separately been calling for policies to support businesses and households. Their policy demands are designed to garner public support for the coming Upper House elections.

Ryosei Akazawa, the Economic Revitalization Minister, was named the top negotiator. He arrives in Washington April 16 for three days of meetings with U.S. officials who include Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer. Akazawa’s mission is to have the Trump administration rethink its tariff policy. He will emphasize Japan’s role as the top foreign investor in the U.S.

Ishiba also launched a task force on U.S. tariff policy, co-headed by Akazawa and Chief Cabinet Secretary Yoshimasa Hayashi, in the general headquarters on tariffs in the Ishiba Cabinet. “Under the leadership of Akazawa and Hayashi, we will construct an all-Japan organization in which the officers work on negotiation with the U.S. and measures for domestic industries beyond the border of ministries,” said Ishiba at the announcement of the task force.

Ishiba is concerned not only about trade and domestic industries but also about foreign exchange. Trump has been complaining about the devaluation of the Japanese yen against the U.S. dollar. As a founder of a hedge fund, Bessent is an expert in foreign exchange. It is likely that the exchange rate will be one of the talking points in the negotiations between Japan and the U.S. later this week. The Minister of Finance, Katsunobu Kato, will lead the currency negotiations. Kato plans to visit Washington for the annual spring meetings of the International Monetary Fund and the World Bank later in April. Although his schedule has not fixed, Kato hopes to have a meeting with Bessent during his visit.

National security is another topic. Trump reiterated that the U.S.-Japan security treaty is unfair because the U.S. pays hundreds of billions of dollars to defend Japan, but Japan does not pay anything. The Ishiba administration will explain that the Japanese government has provided extensive host nation support for the U.S. Forces in Japan. In anticipation of this discussion, Ishiba has included National Security Advisor, Masataka Okano, in the taskforce. Trump seems unaware of Japan’s constitution that prohibits engaging in non-defense war fighting.

Rice will also be a priority topic in the negotiations. “We feel like we could have more and better agricultural market access,” said Greer in pre-negotiation remarks. Because rice is the staple food in Japan, the government strictly controls the rice trade inside the country. The U.S. argues that Japan’s rice trade is not transparent and hard for foreign countries to access. Although the Japanese government is reluctant to open its rice market, the recent price hikes of rice in Japan may increase demand for foreign rice.

It is inevitable that Trump’s tariffs will have a negative impact on the Japanese economy. Beyond the “reciprocal” tariffs, the 25 percent tariffs on cars and other specific products are certain to reduce exports from Japan to the U.S. “The greatest concern is about financing of small and mid-size entrepreneurs,” said the leader of the Constitutional Democratic Party of Japan (CDPJ), Yoshihiko Noda. All political parties in Japan share a common interest in supporting business sectors.

Meanwhile, the parties are fighting over how to help households: should there be a cash handout or a tax cut? On the one hand, cash handouts could be delivered soon after the Diet passes the supplemental budget, while tax cuts would be part of the perennial debate over tax reform. A decision on tax cuts could not be made until the end of this year. On the other hand, a tax cut is more helpful for the families than a cash handout since the cut would last for several years. A cash handout is a one-time event, which has limited and temporary effects.

The parties have different views. The Liberal Democratic Party is leaning toward a cash handout in the hope of immediate effects shortly before the elections. Its coalition partner, Komeito, is urging both a handout and a tax cut. The Democratic Party for the People is promoting reduction of the consumption tax rate from 10 percent to 5 percent. Reiwa Shinsengumi wants to abolish the consumption tax entirely. Noda is reluctant to cut the consumption tax, even though some members of his party support a tax cut.

All parties are motivated to deliver an economic stimulus plan in time for the Upper House election expected to be held in July. To do so, the Diet must pass a supplemental budget by the end of the current Diet session on June 22. Passing a budget bill is hard work for a minority government. Ishiba nevertheless plans to deliver an economic policy package, which may require a supplemental budget.