US-Japan Trade Talks Stall Over Rice Tariffs, Auto Sector Risks

President Donald Trump's 90-day tariff pause led to only three trade deals despite his claims of making 200, with negotiations still stalled with key partners like Japan, Korea, and Thailand. Trump's administration uses tariff threats as leverage, but experts suggest this strategy may be losing effectiveness, especially as partner countries face domestic political pressures and policies that complicate agreements, such as Korea's proposed digital platform bill seen as a barrier to US tech firms. In Japan, tensions are high over Trump's demands that Tokyo increase imports of American rice, a culturally sensitive issue that has become a significant political challenge for Prime Minister Shigeru Ishiba ahead of crucial elections, with rice imports representing a tiny fraction of trade but symbolizing broader trade disputes. The looming 25% US tariff on Japanese goods, particularly autos, threatens to impact Japan's largest export sector significantly, while the stalled negotiations coincide with Japan's effort to diversify trade relationships amid US tariffs and geopolitical shifts, including deepening ties with China highlighted by the upcoming China International Agricultural Machinery Expo. Meanwhile, tariffs on Taiwan have exacerbated long-term economic and geopolitical challenges, accelerating supply chain diversification away from the US and souring Taiwanese public opinion, complicating the US's strategic position in the region. Overall, Trump's aggressive tariff policies are reshaping trade dynamics in East Asia, causing economic disruptions and fueling political tensions with key allies.