US President Donald Trump has threatened to sharply increase tariffs on imports from Japan if Washington and Tokyo fail to strike a new trade agreement by July 9. His ultimatum comes just days before a temporary “pause” on elevated tariffs, imposed this spring, is set to expire.
The Financial Times wrote about it.
Speaking aboard Air Force One, Trump said: “We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it.” He added that if no agreement is reached, the US could impose tariffs of 30% or 35%, or any other rate set by the administration. “We have a very large trade deficit with Japan,” he noted.
In April, the US imposed 24% tariffs on all Japanese imports under the banner of “liberation day,” then reduced the rate to 10% for 90 days to allow time for negotiations. That deadline expires on July 9. At the time, Trump promised to sign 90 deals in 90 days, but so far only the UK has finalized a new agreement.
Trump’s latest comments rattled Japanese financial markets. On Wednesday, the exporter-heavy Nikkei 225 index fell 0.5%, while the yen weakened by 0.2% to around ¥143.75 per dollar.
A key sticking point in the negotiations remains access for American goods to the Japanese market—especially rice and automobiles. The US has accused Japan of refusing to open its market to American-made cars. Automobiles are the main driver of Japan’s trade surplus with the US, which totaled $63 billion in the last fiscal year. The US also imports large volumes of industrial and electrical machinery from Japan, while Japan buys US energy resources, grain, and power generation equipment.
Currently, most Japanese exports to the US face a 10% tariff. However, cars and auto parts are subject to a 25% border tax, while steel and aluminum face a 50% duty.
Negotiations between US and Japanese trade officials have been ongoing since the start of the year. According to sources cited by the Financial Times, Tokyo is insisting on guarantees that any new deal will be final and that the US won’t impose further tariff hikes afterward. Japanese companies want clarity to plan their production and export strategies effectively.