Japan to Offer U.S. Proposals for Cooperation on Rare Earths, Semiconductors; Potential Measures Could Help Counter China, Correct Trade Deficit

The Yomiuri Shimbun

13:45 JST, May 30, 2025

The government is arranging to propose greater cooperation between Japan and the United States to strengthen supply chains for semiconductors and important minerals including rare earths, The Yomiuri Shimbun has learned.

Prime Minister Shigeru Ishiba is believed to have conveyed this proposal to U.S. President Donald Trump when they spoke for about 25 minutes by telephone on Thursday evening.

According to multiple government sources, the proposal is aimed at boosting Japan-U.S. cooperation on economic security, with countering China in mind, and at advancing bilateral negotiations over U.S. tariffs.

After the telephone summit meeting, Ishiba told reporters that the Japan side had called for the talks. Ishiba said both leaders had “exchanged views on ways to further advance Japan-U.S. cooperation in a wide range of areas” and had “deepened” their understanding of each other’s positions on these issues.

During previous rounds of bilateral ministerial-level discussions on U.S. tariffs, the Japanese government has proposed steps to shrink the U.S. trade deficit with Japan, such as increasing imports of U.S. agricultural products and addressing “non-tariff trade barriers” to the export of U.S. automobiles.

During the two leaders’ previous telephone talk, on May 23, Trump mentioned issues such as rare earths and pushed for greater cooperation in the economic security field.

China, which controls most of the world’s production of rare earths, began restricting exports of seven of these minerals to the United States in April as retaliation for Trump’s “reciprocal tariffs.” Rare earths are essential for the manufacture of high-tech products such as electric vehicles, so these restrictions sent alarm bells ringing in the United States.

The Japanese side has leaned toward proposing additional cooperative measures mainly in the fields of rare earths and other important minerals, semiconductors and shipbuilding, in the belief that they could become a powerful bargaining chip in the negotiations. Cabinet ministers are expected to hold discussions on fleshing out these measures.

According to the sources, Japan is considering providing technical support for the processing and refining of important minerals. A proposal has also been floated for cooperation that would involve refining these minerals in a third country which has the necessary technical expertise but where labor costs are lower.

Trump wants semiconductor production to return to the United States, so the Japanese government is considering steps such as providing cooperation on semiconductor manufacturing equipment. If U.S. semiconductor production capacity increases and exports to Japan grow, it could help trim the U.S. trade deficit with Japan.

China holds a 70% share of the global shipbuilding market by volume, and a 90% share of the global ship repair market. Given that Trump wants the U.S. shipbuilding industry to flourish again, the Japanese government has proposed plans during the tariff negotiations such as the joint construction of next-generation ships.

Defense purchases ‘on table’

Increasing purchases of U.S. defense equipment “could be on the table,” economic revitalization minister Ryosei Akazawa said Thursday ahead of high-level talks on U.S. tariffs.

Akazawa made the comment to reporters after his meeting with Ishiba. He insisted that national security and tariff policy were “separate,” but added that buying defense equipment from the United States would “build up” a U.S. trade surplus.

Akazawa arrived in the United States Thursday night to hold a fourth round of ministerial-level talks. He plans to hold talks with U.S. Treasury Secretary Scott Bessent in Washington on Friday.