Japan digs in on rice and automobiles as commerce talks with US stall

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Japan has stated it won’t sacrifice its farmers to safe tariff exemptions from the US, as Tokyo and Washington hardened their positions in a rice diplomacy stand-off and hopes of an imminent commerce deal between the allies light.

The feedback from Japan’s chief cupboard secretary Yoshimasa Hayashi on Tuesday got here as Donald Trump forged Japan, amongst different nations, as “spoiled” and the most recent spherical of commerce negotiations in Washington ended with out clear progress.

“We aren’t fascinated with doing something that may sacrifice the farm sector,” Hayashi stated.

Weeks of negotiations have produced a variety of proposals geared toward breaking a impasse, together with Japan shopping for extra US power and agricultural merchandise and new joint funding mechanisms for US manufacturing, in keeping with folks aware of the talks.

However none has succeeded at shifting the Trump administration’s dedication to lowering its commerce deficit with Japan, which stood at $63bn for the Japanese monetary yr ending in March.

In a put up on his Reality Social website on Monday, Trump centered his ire on rice.

“To indicate folks how spoiled International locations have grow to be with respect to the US of America, and I’ve nice respect for Japan, they received’t take our RICE, and but they’ve a large rice scarcity,” wrote Trump.

The mix of a poor harvest and coverage have pushed rice costs to greater than double previously yr, inflicting momentary shortages, enormous queues for cheaper rice and forcing the federal government to faucet its strategic rice reserve to supply aid.

Japanese rice manufacturing has for many years been an intensely political challenge. The crop instructions an outsized nationwide significance and farmers have been an important base of help for the long-ruling Liberal Democratic occasion.

The US exports some rice tariff free to Japan beneath a World Commerce Group “minimal entry” settlement, however Japan imposes a levy on any imports past a 770,000 tonne restrict.

Tokyo had initially hoped for a fast-track commerce take care of Trump. However with either side dug in, the LDP now faces the likelihood of a marketing campaign for higher home elections on July 20 with out a deal in place, in keeping with folks with direct information of negotiations. That can increase the danger for Prime Minister Shigeru Ishiba, who’s struggling low approval scores and has a comparatively fragile maintain on parliament.

It additionally comes as clouds are gathering over a Japanese financial system that relies upon closely on its automotive business. The nation’s automotive business straight and not directly employs greater than 5.5mn folks, in keeping with the Japan Vehicle Producers’ Affiliation.

Tokyo has constantly demanded a full exemption from Washington’s blanket 25 per cent tariff on automotive imports, in addition to the revocation of the 24 per cent “reciprocal” tariffs that Trump has threatened to impose on Japan. These levies have been paused till a July 9 deadline to signal a commerce deal.

However Japan’s possibilities of securing any tariff exemption within the brief time period seemed to be low and falling, stated two folks near discussions.

In an interview with Fox Information final weekend, Trump bemoaned the “unfair” buying and selling relationship in blunt phrases, claiming that the US “[takes] tens of millions and tens of millions” of Japanese automobiles, whereas the Japanese “received’t take our automobiles”.

Japan’s largest auto corporations have established giant manufacturing amenities within the US over a long time. Automobile and truck exports to the US totalled 1.37mn automobiles in 2024, with the automotive sector representing about 28 per cent of Japan’s items exports to the US.

The US, in flip, exports few automobiles to Japan, the place American automotive fashions are usually seen as too giant and gas consumptive.

“I may ship one [letter] to Japan: ‘Expensive Mr Japan, right here’s the story’,” Trump continued. “You’re going to pay a 25 per cent tariff in your automobiles.”