April 11, 2025
TOKYO – The administration of U.S. President Donald Trump has imposed the full breadth of his “reciprocal tariffs.” The free trade system that has supported the postwar world is on the verge of crisis.
The Japanese government must continue to stress the importance of free trade to the United States. At the same time, the government also must map out a strategy from a long-term perspective with an eye toward changes in the international order centered on the United States.
On April 9, the U.S. government implemented the second round of reciprocal tariffs, targeting about 60 countries and regions with which the United States has large trade deficits. This is in addition to the blanket 10% tariffs imposed as the first round.
The tariffs are applied to Japan at 24% and the European Union at 20%. The tariffs on China, which has been engaged in an exchange of retaliatory tariffs with the United States, will be raised to a total of 104%.
The world’s increasingly globalized manufacturing industries have lowered the cost of making products by selecting the best locations for production and building multifaceted supply chains. The high tariff policy could destroy the foundation of that prosperity. This can never be acceptable.
It is inevitable that the full-scale implementation of reciprocal tariffs will greatly disrupt supply chains. There are concerns that the global economy could plunge into a simultaneous recession.
Trump said his aim is to return manufacturing industries to the United States. Until when will he continue his high tariff policy? Will he eliminate reciprocal tariffs if other countries and regions lower tariffs and review non-tariff barriers? They likely will continue to proceed with negotiations with the United States while keeping a close eye on the behavior of the Trump administration.
Nearly 70 countries reportedly have already contacted Trump. The EU has proposed eliminating tariffs on each other’s industrial products. India is also said to be considering lowering tariffs.
The Japanese government should also establish a structure for negotiations as soon as possible by uniting ministries and agencies and formulate a strategy in great detail.
In the negotiations between Japan and the United States, the Japanese side will be led by Economic Revitalization Minister Ryosei Akazawa, while U.S. counterparts include Treasury Secretary Scott Bessent.
Their talks will likely focus on foreign exchange rates, in addition to tariff reductions on agricultural products and non-tariff barriers such as regulations.
Since the United States is pushing for an unreasonably high tariff policy, Japan should not fall into negotiating in a way that it makes easy concessions. Based on a broad vision and long-term strategy, Japan needs to take a consistent stance in pursuit of its national interests and try to find points of agreement.
It is likely that talks will find rough going and also may be protracted. As an interim measure for industries that would suffer a blow from the U.S. policy, it is hoped that the government will provide thorough support to help them secure funds.
Japan is also a standard-bearer for free trade, such as by having led the Trans-Pacific Partnership free trade accord. It is important for Japan to strengthen its negotiating position while working to develop markets outside the United States by cooperating closely with Britain, which has just joined the accord, and the Association of Southeast Asian Nations.