Japan’s chief trade negotiator Ryosei Akazawa said the country can’t accept the U.S.’s 25% tariffs on cars, adding that the Asian nation’s automakers produce far more cars in the U.S. than they export to America.
Japanese automakers make roughly 3.3 million cars in the U.S. a year, a number that’s far larger than the 1.37 million that they ship there, Akazawa told reporters on Thursday before leaving for Washington to hold his seventh round of trade negotiations with U.S. counterparts. The companies have invested more than $60 billion in the U.S. and created 2.3 million local jobs, Akazawa said.
“We have repeatedly explained to the U.S. that Japan’s automobile industry has made an enormous contribution to the U.S. economy, and we intend to keep explaining this clearly and seek understanding,” Akazawa said. “In any case, we consider the 25% automobile tariff to be unacceptable.”
The auto tariffs are a sticking point in the bilateral negotiations as Washington focuses on its deficits in the sector, while Tokyo tries to protect its key economic pillar. After six rounds of talks over more than two months, the two sides have yet to come to any sort of agreement over tariffs.
Of the 3.3 million cars made in the U.S., about 300,000 are shipped from the U.S. to other nations, also helping to generate a trade surplus for the U.S., according to Akazawa.
Still, Japan’s trade surplus with the U.S. last year stood at ¥8.6 trillion ($59.4 billion), the fifth largest on record. Roughly 82% of the gap was due to cars and car parts. The differential has put the nation in Trump’s crosshairs as he tries to reduce U.S. trade deficits using tariffs.
Akazawa heads for the U.S. capital after Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump last week failed to strike a deal over the higher U.S. tariffs at the Group of Seven summit. As with other nations, Japan faces a combination of across-the-board tariffs and sectoral ones. The former is set to rise from 10% to 24% on July 9 barring a deal while the latter is comprised of a 25% levy on cars and auto parts and a 50% tariff on steel and aluminum.
Tokyo has maintained its stance that it will try to settle all the tariff disputes in one go with a package that also addresses sectoral tariffs. Akazawa on Thursday said he will keep in mind the July 9 deadline while he voiced caution over weakening his negotiating position by setting a firm deadline.
The tariffs are already hitting the Japanese economy with exports to the U.S. slumping, particularly for cars. The economy is facing a risk of entering a technical recession ahead of an upper house election on July 20.