Undercurrents in US-Japan Economic and Trade Negotiations

According to relevant statistical data from the Japanese Ministry of Finance, in 2024, the value of Japan's automobile exports to the United States accounted for 28.3% of Japan's total exports to the US.

There are undercurrents in the economic and trade negotiations between the United States and Japan. On April 22, the Japanese Prime Minister revealed that the US President stated that he hopes to reduce the US trade deficit with Japan to zero.

This is not the first time the US President has publicly stated his hope to reduce the US-Japan trade deficit to zero. In early February, during the Japanese Prime Minister's visit to the US, the US President emphasized the importance of reducing the US trade deficit with Japan during their meeting. He said that the US currently has a trade deficit of about $100 billion with Japan and hopes to reduce this deficit to zero.

Regarding the negotiations, the Japanese Prime Minister said that he will not make major concessions and is not in a hurry to reach an agreement.

An analyst focusing on the supply chain research of Japanese enterprises said that in the current situation of deeply intertwined supply chains, trying to restructure the trade pattern through the so - called "zero deficit" not only violates economic laws but may also trigger a global economic recession. "The US believes that Japan protects its domestic industries through high tariffs and technical barriers, making it difficult for US goods to enter the Japanese market. But this accusation obviously ignores the industrial structure differences between the US and Japan. The trade deficit is a natural result of international division of labor."

"Forced Sale" of US Cars

The latest preliminary trade statistics released by the Japanese Ministry of Finance show that in 2024, Japan's merchandise export value increased by 6.2% year - on - year, reaching 107.9 trillion yen. It has exceeded 100 trillion yen for two consecutive years, setting a record high since 1979. The historic depreciation of the yen is one of the important factors driving up the export value. In terms of regions, the United States is the largest contributor to Japan's trade surplus. In 2024, Japan's trade surplus with the US was 8.64 trillion yen.

In terms of the composition of US - Japan trade, automobiles and auto parts are Japan's main export products to the US. According to relevant statistical data from the Japanese Ministry of Finance, in 2024, the value of Japan's automobile exports to the US accounted for 28.3% of Japan's total exports to the US. If auto parts exports are included, it can account for more than one - third of the total export value. In 2024, Japan exported about 1.37 million cars to the US, accounting for more than 30% of the total export volume.

According to statistical data from the US Department of Commerce, in 2024, in terms of the value of imported passenger cars by country, Mexico ranked first with $48.7 billion, and Japan ranked second with $39.9 billion.

From April 3, the US imposed a 25% tariff on all imported cars made abroad. The auto tariffs will cover cars, light trucks, engines, transmissions, lithium - ion batteries, and smaller parts such as tires, shock absorbers, and spark plug wires. The tariffs on auto parts will start to be levied no later than May 3.

Data from the Japan Automobile Importers Association shows that in the fiscal year 2024, the sales volume of US cars (excluding Tesla) in Japan exceeded 10,000. Since Tesla did not disclose its sales data in detail by region, but based on the data from the Japan Automobile Importers Association, in the first quarter of this year, the sales volume of "other brands" of cars in Japan was 2,120, a year - on - year increase of 56%. Tesla cars are mainly included in this category. Regarding the sales of US car companies in the Japanese market, the Japanese Prime Minister once said that the sales volume of US cars in Japan depends on whether they meet the needs of Japanese consumers.

Agricultural Products Become a "New Battlefield"

In addition to automobiles and auto parts, Japan's trade protection policies for agricultural products represented by rice, beef, aquatic products, and potatoes have also been "criticized" by the US President, who requires Japan to cancel restrictions other than tariffs.

In the rice field, Japan exempts about 770,000 tons of imported rice from tariffs as the "minimum import volume" each year. For imported rice beyond this amount, a tariff of 341 yen (about $2.30) per kilogram is levied. According to data from the Japanese Ministry of Finance, in the fiscal year 2022, Japan imported 675,000 tons of rice through the government mechanism and 7.73 million tons of rice through private trade. In 2023, about half of the rice imported through the government came from the US.

As early as the first term of the US President, rice was regarded as the biggest "no - go zone" in the agricultural trade negotiations between Japan and the US. At that time, the US government tried to increase the upper limit of duty - free imported US rice. However, in the "mini - trade agreement" signed between Japan and the US in 2019, Japan agreed to reduce the tariffs on other US agricultural products such as beef and pork, but retained the rice tariff.

It is worth noting that currently, the upward trend of rice prices in Japan has not been alleviated. The latest data released by the Japanese Ministry of Agriculture, Forestry and Fisheries on April 21 shows that in the week from April 7 to April 13 this year, the average price of 5 - kilogram bags of rice sold in supermarkets across Japan was 4,217 yen (about 218 yuan), more than twice the price of the same period last year, setting a record high since statistics began. The Japanese government started to auction the third batch of reserve rice on the 23rd to stabilize rice prices.

The Japan Agricultural Association estimates that if the rice market is completely opened, about 30% of Japanese farmers will go bankrupt, and the beef industry may shrink by 20%. At the same time, the impact on the industrial chain will be more far - reaching. Japan's food processing industry highly depends on raw materials produced in Japan. The Wagyu - related industry alone creates a production value of 4.8 trillion yen, equivalent to one - sixth of the automobile manufacturing industry.