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The U.S. and Japan have not yet resolved the “tariff” issue

Vladimir Terehov, June 30, 2025

During the meeting between U.S. President Donald Trump and Japanese Prime Minister Shigeru Ishiba, held on June 16 in Canada on the sidelines of the G7 summit, the “tariff” issue could not yet be resolved.
trump and isiba
On the motivation behind the “D. Trump-S. Ishiba” meeting

It should first be noted that holding this meeting was perhaps the primary motive for the aforementioned state leaders’ trip to the latest G7 Summit. No other equally compelling reason was apparent in advance to justify spending time and (state) money on traveling to the Canadian village of Kananaskis to participate in an increasingly hollow ritual. The current picture of this configuration’s futility began to emerge several years ago and only fully crystallized with the radical innovations in the state policy of the 47th U.S. President—that is, the country that is the main participant in the G7.

However, the opportunity to discuss a serious irritant in relations between the two countries—which today, out of the entire “Group of Seven”, can truly be called full-fledged allies—is, we repeat, a compelling reason for D. Trump to leave his office for a day and for S. Ishiba to do so for nearly a week to attend some G7 Summit. Especially since the importance of the U.S.-Japanese alliance will only grow over time. This is particularly true for Washington, whose shift of primary interests toward the Indo-Pacific region has accelerated sharply under the new president.

against the backdrop of other events in the current phase of the “Great World Game,” the very framework of the G7 – on whose sidelines S. Ishiba and D. Trump met – is losing its former significance

Incidentally, among the motives behind the latest outbreak of conflict in the Greater Middle East, there appears to be a significant intention to at least slow down the U.S. pivot to the Indo-Pacific region. This aligns with the interests of certain local players who do not want to be left alone to deal with various regional challenges. And it is by no means just Israel—which undoubtedly has sympathizers among some Arab states—that is involved. These actors could well be counted among those “on our side” whom German Chancellor F. Merz alluded to in his controversial remark about the “dirty work” being carried out in this case by Israel.

Such is the actual state of affairs at the global gaming table in general, and in the “Islamic world” in particular.

The “tariff” issue in U.S.-Japan relations remains unresolved.

Let us note again that Japan was the first to respond positively to D. Trump’s call, addressed to all U.S. trade partners, to begin bilateral negotiations on forming a new system of tariffs on purchased goods: “And hurry up, or things will get much worse for you.” Japan is among those partners who have much to lose should the current U.S. administration move from words to action.

Indeed, Japan’s automotive industry—whose products constitute the bulk of Japanese exports to the U.S.—is already suffering significant losses. Moreover, Washington is, we reiterate, Tokyo’s key military-political ally, and prolonged failure to resolve serious trade issues is bound to cast a shadow over the entire system of bilateral relations.

Therefore, on April 16-17, the first round of negotiations was held in Washington between an interagency delegation led by Japan’s Minister for Economic Revitalization R. Akazawa and their American counterparts, then headed by President D. Trump himself. The sole outcome was the parties’ expressed intention to continue the “fruitful negotiation process.” This pattern persisted through five subsequent “rounds,” each concluding with the same formal statement. Notably, it was reiterated after the most recent round, which took place just two days before the discussed meeting of the two countries’ leaders.

However, if specialized ministers failed to reach an agreement on rather specific bilateral trade issues after two months of continuous efforts, it was hardly realistic to expect a breakthrough in negotiations on the same topic between heads of state. And indeed, no such breakthrough occurred during the 30-minute meeting between D. Trump and S. Ishiba in Kananaskis. The key divergence in the parties’ positions once again emerged in the area of automobile trade.

What is most noteworthy is the fact that Japan, while highly interested in resolving the “tariff” issue with its key ally, has still not raised the white flag during these protracted negotiations. Moreover, there is an authoritative view that S. Ishiba’s government is acting correctly by not yielding to outright blackmail from the American side.

In this regard, his remark at the press conference following the meeting with D. Trump drew attention, stating the intention to continue basing their position on this issue on national interests. Speaking in the same Kananaskis after D. Trump’s departure, S. Ishiba affirmed his country’s commitment to adhering to the current principles of international trade.

Nevertheless, it is still difficult to predict how the firm stance taken by Japan’s Prime Minister on this highly sensitive issue of foreign trade—for a country whose economy is significantly export-oriented—will affect the outcome of the upper house elections scheduled for July 20. This issue, among other things, has already become grounds for opposition criticism of S. Ishiba himself, that is, the leader of the ruling Liberal Democratic Party.

However, at the very last moment, S. Ishiba did manage to achieve something positive in relations with the key ally—an outcome that can be presented to the electorate as a significant success of the political course pursued by his cabinet.

Has the “soap opera” surrounding the merger of Nippon Steel and United States Steel come to an end?

This refers to the conclusion of a two-year-long drama surrounding the merger project between two of the world’s largest steel companies, Nippon Steel (NS) and United States Steel (USS). Recall that by the summer of 2023, the latter found itself in a state of de facto bankruptcy, compelling its management to seek a “strategic investor”—effectively handing over the company to a more financially capable player in international market relations.

By the end of 2023, NS emerged as the most preferable candidate, having pledged to invest approximately $15 billion to “pull the drowning USS out by its hair.”

Here, the American steelworkers’ union loudly and indignantly made its voice heard. This was particularly untimely for those whom such a supposedly “free-market” situation should not have concerned in the first place. We are referring to U.S. political factions that in 2024 entered yet another power struggle. For the leader of one of them—namely, D. Trump with his key MAGA slogan—the prospect of effectively selling abroad one of the symbols of American industrial progress seemed utterly unacceptable.

And yet, after prolonged hesitation in concrete actions, common sense ultimately prevailed with the 47th U.S. President. Moreover, this applied not only to the financial-economic aspect but also to the political component. For we are dealing—let us emphasize this again—with maintaining increasingly vital alliance relations with Japan. Under certain conditions framed as the U.S. holding a “golden share,” the discussed deal received D. Trump’s approval. And this constitutes the significant political “commodity” that S. Ishiba can now present to the Japanese public ahead of the upcoming elections.

Finally, let us note once again that against the backdrop of other events in the current phase of the “Great World Game,” the very framework of the G7 – on whose sidelines S. Ishiba and D. Trump met – is losing its former significance. It makes sense to refer to it mainly in connection with certain pressing issues. In particular, the G7 Summit in Hiroshima two years ago served the author as an opportunity to speak out (on some important issues of both current politics and recent history).

It is quite possible that the text written at that time may still be of interest today, on the eve of the 80th anniversary of the tragic events in that same Hiroshima, and subsequently in Nagasaki.

 

Vladimir Terekhov, expert on Asia-Pacific issues

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