In mid-April of this year, the first round of U.S.–Japan talks was held in Washington, aimed at addressing tensions that emerged in bilateral relations with the onset of Donald Trump’s “tariff war.”
Japanese Government Delegation in Washington
To that end, an interagency delegation led by Minister for Economic Revitalization R. Akazawa was formed. From April 16 to 17, the delegation held a series of meetings in Washington with U.S. officials. The first meeting took place in the President’s working office, clearly indicating the importance Trump attached to resolving a wide range of issues with a country that is, in practice, becoming Washington’s most important ally.
A photo from the meeting, released by the White House, showed the Japanese guest seated in front of Donald Trump, wearing the iconic “MAGA” cap. Upon returning home, this gesture prompted sarcastic remarks from the opposition in the Japanese parliament — apparently not only because of its blatant flattery, but also because it seemed to have had little effect on Trump’s original position across the range of issues discussed.
For instance, Trump once again expressed disapproval of the proposed acquisition of U.S. Steel by Japan’s Nippon Steel — a stance fully aligned with the slogan on the guest’s hat.
Even a modest success would be welcome for Prime Minister S. Ishiba and the ruling Liberal Democratic Party, especially in addressing tensions with a key strategic partner. Ishiba and the LDP face a very real threat of another electoral setback in the upcoming July elections for half of the upper house seats in parliament.
Among the electorate’s many grievances against Ishiba’s administration, the overarching “rice problem” continues to loom especially large — and has worsened despite emergency measures. In this context, a potentially attractive proposal for the United States is under consideration: completely duty-free access for American rice to the Japanese market. This idea may be raised during the next round of talks, expected at the end of April.
But, of course, not “for free.” In return, Japan expects some preservation — in more or less favorable form — of the current tariff regime on automobile trade, which remains the central pillar of Japanese exports to the United States.
Overall, both parties appear to recognize that the negotiation process, despite their public optimism, will be slow and difficult.
Is Trump Trying to “Reverse the Grinder of History”?
The radical nature and global scale of the Trump administration’s actions, particularly in the economic domain, inevitably invite philosophical reflection. It seems the new American president is affected by a familiar syndrome — nostalgia for the past: “The golden age was sown first…” Succumbing to this type of sentiment is not only pointless but counterproductive. This is not about opportunistic political romanticism, of the kind that imagines “how easily things were solved back then” — whether in the “United States of the Founding Fathers,” the “Soviet Union,” or “Holy Russia, which we lost.” Rather, it concerns a certain worldview.
Donald Trump, an American patriot, appears to acutely and painfully perceive the near-total disconnect between what was and what is in his country — even though only a few decades separate the two. The United States, once a major global supplier of advanced industrial products, has become their importer. This is a major reason for the country’s vast trade deficits with its main partners — a key motivator behind Trump’s actions.
The picture is further darkened by the fact that many of today’s imported technologies were originally developed in the U.S. This is particularly true of semiconductors — the foundational component of all cutting-edge industries. Still, labeling the current situation in chip manufacturing as “theft” is an exaggeration, since the relocation of production to Taiwan followed the logic of outsourcing, a business model that gained popularity 50–60 years ago. Yet after half a century, the shortcomings of this elegant idea have become increasingly apparent.
Former Treasury Secretary Janet Yellen, in an interview with Bloomberg TV, highlighted the counterproductive nature of this kind of emotional policy-making. Her words should be considered first and foremost as the opinion of a top-tier expert — political leanings aside. Especially as she provided relevant, concrete examples.
Specifically, she cited 2024 financial results from two facilities of Taiwan Semiconductor Manufacturing Company — the global leader in chip production. One plant is in Nanjing, China; the other in Arizona, USA. The latter was a product of the “fair trade restoration” strategy that Trump pursued during his first term. According to Global Times, the Nanjing plant ended the year with $800 million in revenue, while the Arizona facility posted losses of nearly $450 million.
While Chinese experts naturally point to broader U.S. policy as the root cause of this disparity, the actual reasons run deeper. TSMC leadership foresaw the risks as early as 2019, when the politically driven deal to build the Arizona plant was signed. Even then, they predicted that the facility’s output would be at least 50% more expensive than that of its Taiwanese counterparts.
Another unintended side effect of the outsourcing model also became evident: the local workforce in Arizona proved largely unsuitable for the complex demands of semiconductor manufacturing. Taiwanese supervisors reportedly used derogatory language and fired American employees. A lawsuit in California is now examining allegations of racial discrimination — with local workers as plaintiffs and Taiwanese management as defendants.
Additional details raise further important questions. For instance, by the end of 2023, “an overwhelming majority” of the Arizona plant’s 2,700 employees were reportedly of Taiwanese or Chinese origin. The presence of Taiwanese personnel was expected — when the deal was signed, TSMC leadership saw the need to send around 500 specialists to the U.S., despite their scarcity even at home. But who exactly are the “Chinese”? Are they PRC citizens who previously worked at TSMC’s Nanjing plant? If so, what does this mean for the “security issue” that underpinned the entire project? Did U.S. intelligence agencies choose to ignore it?
Finally, let us allow ourselves a broader conclusion. The developments outlined above — along with other signs of turbulence in current U.S. policy as a leading global power — reflect a state of instability in the entire system of international relations. Only by taking into account the interests of all its participants and coordinating their efforts will it be possible to exit this dangerous state without particularly serious costs. Such an outcome can only be achieved through a prolonged process — one that does not allow for solving emerging problems in the spirit of “cavalry charges.”
In fact, the recently launched U.S.–Japan tariff negotiations serve as an illustration of precisely this.
Vladimir Terekhov, expert on the issues of the Asia-Pacific region
