Japan’s PM Shigeru Ishiba Optimistic About Avoiding US Tariffs Amid Trade Talks

Japanese Prime Minister Shigeru Ishiba voiced optimism on Sunday (Feb 9) that Japan would escape higher US tariffs, emphasizing that President Donald Trump acknowledges Japan’s massive investments in the United States and the employment opportunities they generate.

Japan’s Investment in the US

During his first summit with Trump at the White House on Friday, Ishiba outlined to the US president how Japanese automakers and companies are contributing to job creation in America.

While the two leaders did not specifically discuss auto tariffs, Ishiba admitted he was unsure whether Japan would be subject to the reciprocal tariffs Trump has threatened to impose on imported goods.

So far, Japan has avoided becoming entangled in Trump’s escalating trade war, which has seen the US slap tariffs on Canada, Mexico, and China. Though Trump initially announced 25% duties on Canadian and Mexican goods, he has postponed them to allow for negotiations.

The global economy remains on edge as Trump’s return to the White House on January 20 has reignited trade tensions worldwide.

Trump’s Recognition of Japan’s Role

Ishiba remains confident that Japan’s economic contributions will help prevent a trade conflict with the US.

“Japan has been the largest foreign investor in the United States for five consecutive years,” Ishiba noted, citing data from the US Commerce Department that pegged Japan’s foreign direct investment in the US at $783.3 billion in 2023—higher than Canada and Germany.

“Japan is creating many jobs in the US. I don’t believe Washington will rush into imposing higher tariffs,” he added.

Trump has urged Japan to reduce its annual $68.5 billion trade surplus with the US but is optimistic about resolving the issue, given Ishiba’s pledge to increase Japanese investment in the US to $1 trillion.

Key Investment Sectors

Ishiba highlighted liquefied natural gas (LNG), steel, artificial intelligence (AI), and automobiles as key sectors where Japanese companies could expand their US investments.

He also referenced Trump’s push to prevent Nippon Steel from outright purchasing US Steel, instead favoring an investment approach to keep the iconic American company under US ownership.

“Investment is being made to ensure that it remains an American company, with American management and employees,” Ishiba emphasized.

Military Spending and Public Support

On the issue of defense spending, another area where Trump has pressured allies, Ishiba said Japan would not increase its defense budget without first securing public support.

“It is crucial that taxpayers understand and support what is deemed necessary,” he stated.

As trade negotiations continue, Japan hopes to maintain strong economic ties with the US while avoiding tariff escalations that could impact businesses on both sides.