June 2, 2025
TOKYO – New forms of industrial collaboration between Japan and the United States are taking shape in connection with the two countries’ tariff negotiations. Tokyo and Washington should deepen cooperation in a wide range of fields, and it is hoped that such efforts will lead to a review by the United States of its high tariff policy.
Ryosei Akazawa, minister in charge of economic revitalization, held a fourth round of ministerial-level talks with U.S. Treasury Secretary Scott Bessent and other officials during his visit to the United States. “I was able to confirm that the discussions are progressing toward an agreement,” Akazawa said afterward.
The two sides will accelerate the talks with a view to reaching an agreement between the Japanese and U.S. leaders on the sidelines of the Group of Seven summit in mid-June, he said.
A crucial theme in the negotiations is concrete measures to deepen cooperation on economic security.
In his March speech to Congress, U.S. President Donald Trump expressed his intention to resurrect the nation’s shipbuilding industry to enhance the defense industry.
Based on this, Japan is reportedly considering such specific measures as joint development and production of new icebreakers based on the technology used in Japan’s icebreaker Shirase, and the joint manufacturing of vehicle carriers utilizing Japanese designs and parts.
The United States was once the largest shipbuilder in the world. However, China now accounts for 70% of the global market share for building new vessels. The U.S. share is small, and there is considerable room for cooperation with Japan, which still has competitive strength.
It is also important for the two countries to cooperate in the field of rare earths, which are essential for the production of electric vehicles and military equipment.
China used restrictions on rare earth exports as a weapon in an exchange of retaliations over Trump’s tariffs. As a result, the United States is believed to have a heightened sense of crisis.
The Japanese government is considering providing technical support for the processing and smelting of important minerals such as rare earths.
Nippon Steel Corp.’s plan to acquire U.S. Steel Corp., a major steel company in the United States, may also provide tailwind for the tariff negotiations.
Trump gave a speech in a suburb of Pittsburgh on Friday and welcomed the move, saying, “We are going to have a great partner.” He proudly said, “There has never been a $14 billion [about ¥2 trillion] investment in the history of the steel industry in the United States of America.”
The global market is flooded with cheap Chinese steel products. Injecting Nippon Steel’s advanced technology and capital into U.S. Steel would enhance the U.S. steel company’s competitiveness. It will also help strengthen domestic production, which the United States considers important for economic security.
However, it was pointless for Trump to announce in his speech that he would raise additional tariffs on steel and aluminum products from 25% to 50%.
To build a new economic relationship between Japan and the United States, a major condition is that the United States must first reconsider reciprocal tariffs and high tariffs on such products as vehicles and steel products. The United States needs to be aware that the development of its manufacturing industry also depends on whether it revises its high tariff policy.