Washington, July 2, 2025 – President Donald Trump escalated trade tensions with Japan Tuesday, warning that he could impose tariffs of “30%, 35% or whatever the number is that we determine” on Japanese imports if a formal trade deal isn’t finalized by the looming July 9 deadline .
The current situation stems from Trump’s “Liberation Day” tariff announcement on April 2, which triggered a default 24% tariff on Japanese goods. The rate was temporarily reduced to 10% to allow a 90‑day negotiation window—set to expire in a week.
Trump expressed doubt about reaching an accord, saying, “I’ll write them a letter… you pay a 30 per cent, 35 per cent… because we also have a very big trade deficit”
What’s at Stake?
Trade and deficit concerns: Trump criticized Japan’s refusal to agree to U.S. demands—such as taking more American rice and easing restrictions on U.S. automobile exports—while enjoying a $63 billion trade surplus
Tariff burden: As things stand, most Japanese exports face 10% tariffs, vehicles and parts 25%, and steel and aluminum as much as 50%
Japanese Response
Prime Minister Shigeru Ishiba emphasized Japan’s substantial investment in the U.S. and reaffirmed the country’s commitment to protecting national interest by focusing on mutual investment rather than retaliatory tariffs
Meanwhile, Chief Trade Negotiator Ryōsei Akazawa is reportedly preparing his eighth visit to the U.S., potentially this weekend, to intensify negotiations.
Market Ripples
Asian stocks reacted negatively—Japan’s Nikkei dropped about 0.5%, while other regional markets showed mixed results—amid growing anxiety over the looming deadline
Broader Context
Trump has indicated that a trade deal with India is much closer to completion, suggesting Tokyo might be passed over if no agreement is reached by July 9
To date, only the U.K. has concluded a bilateral deal under Trump’s reciprocity tariffs
Critics argue that Trump’s tariff strategy reflects inconsistency and could strain global trade relations and economic growth
Bottom Line: With just days remaining before the July 9 expiration of Japan’s tariff truce, President Trump appears poised to impose sweeping duties—possibly up to 35%—on Japanese imports unless a deal materializes. Tokyo is accelerating diplomatic efforts to avert such escalation, but both sides remain steadfast in their positions.
