The US has confirmed it would end stacking of universal tariffs on Japan and cut car levies as promised, Japan’s top trade negotiator Ryosei Akazawa said after a meeting on Thursday with his counterparts in Washington.
His comments following talks with US Secretary of Commerce Howard Lutnick and US Secretary of the Treasury Scott Bessent provided some relief amid doubts over the details of the trade deal reached between the two nations last month.
The US officials expressed regret that the stacking rule had been applied to Japan despite a verbal agreement and said Washington would refund any overpaid levies, he said.
Photo: Reuters
No time frame was agreed for the implementation, Akazawa said after the meetings.
There has so far been no official comment on the latest meetings from the US side.
Japan was hit with higher-than-expected universal tariffs as part of the wave of new levies introduced on Thursday. While the scale of the discrepancy was likely minor, the confusion sparked renewed criticism of Japanese Prime Minister Shigeru Ishiba, who already faces calls to step down over a poor election showing.
“We have confirmed that when the US side takes measures to revise the executive order on universal tariffs, they will issue another order to reduce tariffs on cars and auto parts,” Akazawa said.
“We will continue to urge the US side, through all available means and channels” to make those things happen, he said.
He added that he was not sure when the orders would be issued, but he did not expect it to take as long as six months or a year.
Under the stacking system, the 15 percent tariff applied to Japan is being added to existing levies on its products. When Japan receives an exemption, Akazawa said that the 15 percent rate would apply to items that previously had levies of less than 15 percent, while items that in the past had tariffs of more than 15 percent would no longer face additional levies.
More importantly for the Japanese economy, automakers are still struggling with tariffs at 27.5 percent — a combination of a previous 2.5 percent rate and a new 25 percent levy.
“With each day that passes, the losses incurred by Japanese companies are mounting,” Akazawa said, adding that some companies are seeing an hourly loss of ￥100 million (US$678,493), without citing which companies they are.
“In this respect, there is no change to what we have been saying previously. We are seeking the issuance of the executive order as quickly as possible — whether by a day or even by a moment,” he said.
The lack of clarity on the timing of a promised cut to 15 percent is making it hard for the companies, mainstays of the economy, to plan ahead. The auto sector employs about 8 percent of the nation’s workforce and is a trendsetter for wage growth, which has supported the central bank’s gradual interest rate hikes.
The US administration has come under fire from the US car industry over the levies agreed with Japan, which critics say fail to address the biggest source of the US trade deficit with its Asian ally. About 80 percent of the trade gap was due to cars and car parts last year.
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