Japanese Prime Minister Optimistic About U.S. Tariffs

TOKYO (Reuters) – Japanese Prime Minister Shigeru Ishiba expressed optimism on Sunday that Japan could avoid higher U.S. tariffs, noting an understanding from President Donald Trump regarding Japan’s significant investment in the U.S. and the jobs it generates.

At his first White House summit on Friday, Ishiba told public broadcaster NHK that he explained to Trump how many Japanese automakers are creating jobs in the United States.

Ishiba indicated that auto tariffs were not specifically discussed, and he remains uncertain about Japan’s exposure to the tariffs Trump plans to impose on imports.

Tokyo has thus far avoided the trade conflicts that Trump initiated early in his presidency, having already announced tariffs on goods from Canada, Mexico, and China, while delaying 25% duties on North American neighbors to allow for negotiations.

The rising trade tensions since Trump returned to the White House on January 20 pose risks to the global economy.

Ishiba asserted that Trump acknowledges Japan as the world’s largest investor in the United States for five consecutive years, distinguishing it from other countries.

“Japan is creating many U.S. jobs. I believe (Washington) won’t go straight to the idea of higher tariffs,” he stated, expressing hope that both nations can avoid a tit-for-tat tariff conflict. “Tariffs should be implemented in a manner that benefits both sides.”

“Any action that exploits or excludes the other side won’t last,” he added. He questioned whether there are genuine issues between Japan and the United States that would warrant higher tariffs.

According to the latest U.S. Commerce Department data, Japan had the highest foreign direct investment in the U.S. in 2023, totaling $783.3 billion, surpassing Canada and Germany.

Trump urged Ishiba to address Japan’s $68.5 billion annual trade surplus with the U.S. but remained optimistic, citing Ishiba’s commitment to elevate Japanese investment in the U.S. to $1 trillion.

On Sunday, Ishiba highlighted potential investment areas, including liquefied natural gas, steel, AI, and automobiles. He also addressed Trump’s interest in Nippon Steel investing in U.S. Steel, in lieu of purchasing the American company, a move opposed by Trump and blocked by Joe Biden.

“Investment is being made to ensure that it remains an American company, operating under American management with American employees,” Ishiba emphasized. “The key point is how to ensure it remains an American company. From President Trump’s perspective, this is of utmost importance.”

Regarding military spending, an area Trump has pressed allies to increase, Ishiba conveyed that Japan would not raise its defense budget without prior public approval, emphasizing the importance of taxpayer understanding and support for such measures.