U.S.-Japan Trade Negotiations Stalled; No Deal Reached Between Trump and Shigeru Ishiba

Cailian Press, June 17 — Japanese Prime Minister Shigeru Ishiba did not reach a trade agreement with U.S. President Donald Trump during the G7 summit, intensifying concerns over Japan’s economic outlook amid the impact of U.S. tariffs.

“We will continue to actively coordinate with the United States to achieve a mutually beneficial agreement without compromising Japan’s national interests,” Ishiba stated on Monday during the G7 summit in Calgary, Canada. “There are still differences on certain issues between the two sides.”

Trump remarked that he had a “very good conversation” with Ishiba and emphasized that a deal remains possible. “The Japanese are very tough,” he said. Regarding potential consequences of a failed agreement, Trump added, “Eventually you have to understand, we’ll send a letter telling them this is the price you have to pay, or don’t do business with us.”

Japan currently faces 25% tariffs on automobiles and auto parts, as well as 50% tariffs on steel and aluminum. In addition, the U.S. has imposed a 24% reciprocal tariff rate on Japan, temporarily reduced to 10%.

According to a May report by Daiwa Institute of Research, if the reciprocal tariff rate rises from 10% to 24%, Japan’s real GDP could shrink by approximately 2.2% by 2029. Auto tariffs remain a central issue in the talks. The automotive sector is vital to Japan’s economy, employing about 5.6 million people—8.3% of the national workforce—and accounting for roughly 10% of GDP, according to the Japan Automobile Manufacturers Association.

Major Japanese automakers including Toyota, Honda, Mazda, and Subaru are projected to suffer combined losses exceeding $19 billion in the current fiscal year due to tariff pressures.
“For Japan, the auto industry is a matter of national interest. We will protect it at all costs,” Ishiba affirmed in media interviews.

When asked whether auto tariffs were formally discussed, Trump declined to elaborate, stating, “We’ll see what happens.” Media reports indicate that Japan had previously proposed several potential concessions aimed at narrowing its trade surplus with the U.S., including increasing soybean imports and enhancing collaboration in the shipbuilding industry.

Japan also emphasized its status as the largest investor in the U.S., arguing that a weakened domestic economy from tariffs would diminish its investment capacity in America.