Trump threatens steep tariffs as Japan demands final trade deal: FT
3 Min Read
US President Donald Trump has threatened to raise tariffs on Japan and other trade partners if they fail to reach new agreements by July 9.
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Workers wipe the glass window in front of an electronic stock board showing Japan's Nikkei index at a securities firm on February 26, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
US President Donald Trump has renewed threats to escalate tariffs on Japan and other key trade partners if they fail to strike new agreements with Washington by July 9, the day his administration's temporary tariff pause is set to expire.
A report by the Financial Times (FT) on Wednesday highlighted that Trump cast serious doubt on reaching a deal with Tokyo, despite Japan's early engagement following his sweeping tariff imposition in April, saying, "We've dealt with Japan. I'm not sure we're going to make a deal. I doubt it."
"I'll write them a letter to say 'we thank you very much, and we know you can't do the kind of things that we need, and therefore you pay a 30 per cent, 35 per cent' or whatever the number is that we determined. Because we also have a very big trade deficit," he added.
Tariff deadline
The remarks follow the implementation of Trump's "reciprocal" tariffs on April 2, which originally placed a 24% levy on Japanese imports, reduced to 10% for a 90-day negotiation window. Trump has since confirmed that he is not considering any extension, telling reporters aboard Air Force One that the deadline stands firm.
According to FT, the renewed pressure has rattled Japanese financial markets, with the Nikkei 225 falling 0.8%, the Topix slipping 0.3%, and the yen weakening slightly to ¥143.6 per dollar. The broader Bank of Japan's Tankan survey showed that while corporate sentiment remained somewhat optimistic, worries over potential tariff hikes were growing among manufacturers.
Treasury Secretary Scott Bessent reinforced Trump's stance, warning that trade partners who fail to negotiate "in good faith" would face the full brunt of the resumed tariffs after July 9.
Although Trump had previously claimed he would sign 90 trade deals during the pause, only the United Kingdom has finalized an agreement to date. Additionally, FT reported that a preliminary deal with China is reportedly in progress, while other countries are racing against time.
Read more: Japanese investors dump $20bn in intl bonds amid Trump’s tariff shock
Trade standoff
Japan, which currently faces a 10% general export tariff, is subject to additional duties of 25% on cars and car parts and 50% on steel and aluminum.
Trump has accused the country of being "spoiled" and resistant to buying more American rice or allowing US-made vehicles into its market. Meanwhile, Japanese officials are seeking a binding guarantee that any new deal will be the final word on tariffs.
"Japan is digging its heels in with an insistence that the US agrees that, whatever the deal is, this really is it, and there will not be any further tariff hikes. Japanese companies need to know exactly what the tariff will be and start planning for that, and so Tokyo is negotiating for a deal that represents a covenant the US will stick to," a source close to the talks told Axios.
As the deadline draws near, it remains unclear whether Trump's hardline trade approach will ignite a broader confrontation with global economic consequences.
