Japan Seeks Trade Deal Amid U.S. 25% Tariff Threats

Japanese Prime Minister Shigeru Ishiba has emphasized ongoing negotiations with the United States to reach a mutually beneficial trade agreement following President Donald Trump's announcement of 25% tariffs on Japanese goods starting August 1. Ishiba highlighted that recent talks have already helped avert even steeper tariffs of 30% to 35%, while Tokyo continues to protect its national interests amid looming economic consequences. Finance Minister Katsunobu Kato confirmed that tariffs would be held at current levels until the August 1 deadline and stressed Japan's commitment to tough negotiations and protecting local industries, including support for corporate financing. The tariffs, particularly on automobiles which represent nearly 30% of Japan's exports to the U.S., remain a key sticking point, with Japan unlikely to sign a deal without significant cuts on auto tariffs. Market reactions include a slump in the yen and reduced expectations for a near-term interest rate hike by the Bank of Japan, reflecting concerns over the economic impact of the trade tensions. Both governments appear open to revising proposals depending on negotiation progress, but the outcome remains critical for Japan's economic growth and bilateral relations amid a protectionist global trade environment.