Japan is considering a range of financial and technical offerings—from investment in an Alaskan LNG pipeline to advanced shipbuilding capabilities—as it aims to secure a tariff deal with the US ahead of the mid-June deadline.
Prime Minister Shigeru Ishiba said Tokyo will highlight its strength in ice-breaker construction amid rising Arctic security concerns, while also offering support in maintaining US naval vessels operating in the Asia-Pacific. His remarks came as trade negotiator Ryosei Akazawa returned from a third round of talks with US officials in Washington.
Speaking in Tokyo, Akazawa said the goal is to finalise a comprehensive agreement before the planned bilateral meeting between Ishiba and US President Donald Trump at next month’s G7 summit in Canada.
“There were concrete discussions on trade expansion, non-tariff measures, and economic security cooperation,” Ishiba said on Sunday. “Progress was made. We will continue the discussions with the G7 summit in mind.”
The urgency is fuelled by economic concerns at home, with US tariffs threatening to push Japan into a technical recession ahead of the July upper house election. Trump had earlier called Ishiba to express willingness to meet in Canada, underscoring the high-level focus on resolving trade tensions.
Akazawa, who is expected to return to Washington later this week to meet US Treasury Secretary Scott Bessent, reiterated that Japan is pushing for a single-package deal that includes the removal of the 25% tariff on Japanese automobiles.
“Negotiating piece by piece could lead to misjudgements,” he said in parliament. “We are prioritising a comprehensive agreement.”
He noted that tariffs are already having a significant impact, particularly on automakers. Subaru Corp, based in Gunma prefecture, may face US$2.5 billion in tariff costs unless mitigated.
Despite the mid-June target, Akazawa cautioned against rigid deadlines. “Setting fixed timelines can lead to concessions,” he said. “We will negotiate firmly, protecting national interests.”
Tokyo is also showcasing its investment contributions to the US economy. Reports suggest Japan could join a US$44 billion Alaska LNG project as part of the trade package, though concerns remain about the project’s scale. Separately, SoftBank’s Masayoshi Son has proposed a US-Japan sovereign wealth fund focused on technology and infrastructure.
The atmosphere around negotiations has been buoyed by Trump’s unexpected endorsement of a partnership between US Steel Corp and Japan’s Nippon Steel Corp. Analysts believe this could positively influence trade talks, though details remain unclear.
“This is very positive for trust-building,” said Kurt Tong, former US diplomat in Asia and now managing partner at the Asia Group. “But ultimately, the standoff over auto tariffs remains the key hurdle.”
The proposed timeline aligned with the G7 summit could give Japan leverage, particularly if it secures relief on auto tariffs—a top priority as it heads into elections.
Trump’s tariff regime has imposed a 25% levy on Japanese autos, steel and aluminium, and a 10% general tariff. Without a deal, tariffs could rise further to 24% in early July.
Auto exports represent about a third of Japan’s shipments to the US, and the sector employs roughly 8% of the Japanese workforce. In April, a decline in US-bound auto exports raised concerns of a recession after Q1 economic contraction.–BLOOMBERG
