Key Moments:
- Prime Minister Ishiba confirmed Japan’s unwavering stance regarding the removal of auto tariffs, but stressed the country’s agricultural sector remains non-negotiable.
- The increase of corn imports is being considered as an alternative.
- Japan’s auto industry is under pressure due to US tariff policies, with Mazda disclosing a 45.1% drop in net profit.
Tokyo Resists US Auto Tariffs
Monday saw Japanese Prime Minister Shigeru Ishiba confirm that Japan remains committed to pressuring the United States to remove all trade tariffs. While expanding purchases of American corn is being weighed as a potential concession in ongoing negotiations, Ishiba made clear that Japan’s agricultural sector will not be compromised to secure lower levies on its automobile exports.
The US has hit several Japanese goods, including cars, with steep tariffs. The 25% duty on automobiles, in particular, prompted Tokyo to seek relief via bilateral talks. Despite two rounds of negotiations, Tokyo has yet to win significant tariff exemptions.
Japan’s rice sector has served as a point of contention, especially given how rice farmers form a key support base for the ruling Liberal Democratic Party. Japanese officials have thus presented corn imports as a more viable move for Japan, with Ishiba stating that corn can be utilized as ethanol fuel. “Usage as biomass would be in Japan’s national interest,” he stressed, signalling interest in further talks regarding the use of corn for consumption and energy. US ZCN5 corn futures have risen 0.7% to $452.13.
As revealed by anonymous sources who spoke with Reuters about the trade negotiations, the potential for technical cooperation with regard to shipbuilding is being explored as another key point in trade discussions.
According to Japanese officials, a permanent halt to the Trump administration’s 25% duty on cars is the only move that would convince Japan to reach a trade agreement with the US. Japan’s chief trade negotiator Ryosei Akazawa echoed the country’s firm stance, stating that he would not back down from demanding a full repeal of tariffs.
The consequences of the current tariffs are already visible. Mazda’s fiscal year net profit has fallen by 45.1%, and the company is yet to issue earnings guidance through March 2026. Toyota Motor is also facing significant financial headwinds due to tariffs, anticipating a substantial $1.3 billion loss for April and May 2025.
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