Ex-METI Minister: Japan Must Prepare for Long-Term Japan-U.S. Tariff Talks; Cautions Against Rushed Resolution

The Yomiuri Shimbun

16:07 JST, April 16, 2025

Ken Saito, a former minister of economy, trade and industry, advised during an interview with The Yomiuri Shimbun that Japan should prepare for extended negotiations over Japan-U.S. tariff policy, suggesting talks could evolve into a lengthy dispute. The following are excerpts from an interview conducted by Yomiuri Shimbun Staff Writer Michitaka Kaiya.

The key to navigating the Japan-U.S. tariff negotiations, in my opinion, is to construct and present a logical argument that strikes a chord with [U.S.] President [Donald] Trump.

It appears the United States is increasingly leveraging tariffs as a strategic instrument for manufacturing revitalization in the U.S. rather than simply for transactional deals. Consequently, a collaborative approach between Japan and the United States, focused on revitalizing manufacturing, could prove effective.

Japan is the largest investor in the United States, with U.S.-based Japanese companies exporting more than 10 trillion yen worth of products worldwide, contributing to the U.S. economy.

Beyond simply pointing out to U.S. President Trump Japan’s ongoing and increasing investment, it is imperative to articulate how this investment is directly contributing to the resurgence of U.S. manufacturing. Furthermore, Japan’s strategic advantage lies in promoting cooperative economic security measures that would counter to China.

Given the expected complexity and sensitivity of these negotiations, it is advisable to refrain from seeking a hasty resolution. We should anticipate various developments, including potential market losses for U.S. agricultural products as a result of U.S.-China relations and fluctuations in the U.S. Treasury bond market.

We should accurately assess these shifting dynamics and use them as bargaining chips. If the impact on the U.S. economy expands, time may be on Japan’s side. While exploring the option of an early settlement, we should also be prepared for sustained and arduous talks, potentially evolving into prolonged negotiations.

The Japanese government should, indeed, proceed with outlining bargaining chips, such as non-tariff barriers and the treatment of agricultural products, but how we play these cards is crucial in negotiations.

The effectiveness of these bargaining chips fluctuates with prevailing economic conditions, rendering premature deployment inadvisable. Moreover, even if presented during ministerial-level negotiations, there remains a significant risk President Trump will reject or reverse any agreements reached.

Therefore, even during ongoing ministerial-level negotiations, it is important for Prime Minister [Shigeru] Ishiba to periodically engage in telephone consultations with President Trump to gauge his evolving intentions. However, failure at the summit level could lead to a protracted impasse, underscoring the critical need to avoid such an outcome.

Japan’s status as an early participant in these negotiations is double-edged. An early resolution allows us to set the benchmark for agreements and mitigate the potential impact on domestic industries.

Conversely, the United States could interpret the situation differently and potentially escalate its demands on Japan to set a precedent for subsequent negotiations with other nations.

Sentiments of resistance to free trade and reluctance to take responsibility for maintaining international order is likely to remain influential within the United States.

To counter its potential escalation into a dominant trend, it is essential to reinforce the importance of free trade through concerted international solidarity.

One option is for Japan to take the lead in issuing a statement with member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other nations. Moreover, we could extend an invitation to countries that align with these principles to join the initiative.

Ken Saito

Saito, 65, graduated from the University of Tokyo’s Faculty of Economics. As a bureaucrat in the former International Trade and Industry Ministry, now the Economy, Trade and Industry Ministry, he was involved in Japan-U.S. automobile negotiations during the intensification of trade friction in the 1990s. First elected to the House of Representatives in 2009, he has served for six terms. He has held positions such as minister of agriculture, forestry and fisheries, minister of justice, and minister of economy, trade and industry.