By Leika Kihara and Makiko Yamazaki

Japan Seeks Full Removal of U.S. Tariffs

TOKYO (Reuters) – Japan aims for the complete removal of additional tariffs imposed by U.S. President Donald Trump, said its top negotiator Ryosei Akazawa on Tuesday, prior to his three-day visit to Washington.

Japan, a longstanding ally of the U.S., faces 24% levies on exports to the United States, although these tariffs, like most of Trump’s sweeping ‘reciprocal’ tariffs, have been paused for 90 days. However, a 10% universal rate and a 25% duty on cars remain, which is particularly detrimental given that the U.S. is Japan’s largest export market and automobile shipments constitute about 28% of its exports there.

Akazawa stated, “The tariffs already in place are eating away Japanese firms’ profits day by day.” He added, “It won’t be easy, but the government will work as one to achieve our goal at the earliest date possible. Our goal is the complete removal of additional U.S. tariffs.”

As Japan’s economy minister, Akazawa is visiting the U.S. from Wednesday to Friday for discussions with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer. Japan hopes to persuade the U.S. that both nations can reach a “win-win” situation without relying on tariffs, possibly by increasing Japanese investment in the U.S. No specific timeframe for reaching a deal was provided.

Due to its heavy dependence on the U.S. market, Japan has a lot at stake in these negotiations, which are expected to address tariffs, non-tariff barriers, and the contentious topic of exchange rates.

Most economists predict Trump’s tariffs will reduce Japan’s economic growth by 0.6 percentage points in the current fiscal year ending March 2026, according to a recent survey by the Japan Center for Economic Research.

The market turmoil caused by Trump’s tariffs may dampen business sentiment and disrupt an upward trend in wages and prices, which the Bank of Japan (BOJ) sees as essential for normalizing its ultra-easy policy.

Global financial markets have been volatile due to Trump’s inconsistent comments on tariffs, with some analysts interpreting the recent sharp decreases in U.S. Treasuries and the dollar as a sign of diminishing confidence in the safe-haven status of U.S. assets.

A senior BOJ official downplayed the possibility of global markets entering a dangerous “dash for cash” situation. According to Akio Okuno, head of the BOJ’s monetary affairs department, “Unlike during the global financial crisis, we’re not seeing a major decline in short-term liquidity.”

However, uncertainty surrounding the impacts of Trump’s policies may delay the BOJ from raising interest rates for some time, including at its upcoming policy meeting on April 30-May 1.

Currency Issues

The recent rise of the yen, mainly driven by the dollar’s overall decline, could reduce potential pressure from the U.S. to support the yen against the dollar and enhance U.S. export competitiveness, according to some analysts.

Tokyo has pushed to keep the contentious currency rate issue separate from direct trade negotiations and to discuss it only between the two countries’ finance chiefs. Finance Minister Katsunobu Kato mentioned he is planning to travel to Washington next week for the spring International Monetary Fund and World Bank meetings, where he might meet with Bessent.

Kato stated that Japan and the U.S. agree that markets should determine exchange rates, and that erratic currency fluctuations can negatively impact economic and financial stability. “I hope to continue dialogue with the U.S. based on this shared understanding,” he said.