Japan Proposes 'Contribution Card' to Trump's Tariffs... US Remains Indifferent

【Tokyo=Kim Kyungmin Correspondent】 The gap in positions surrounding the core industry of automobiles in the tariff negotiations between Japan and the United States remains unbridged. Japan is proposing to adjust tariff rates based on contributions to production and employment in the US, but President Donald Trump of the United States prioritizes reducing the trade deficit and criticizes Japan's low import of US-made cars, highlighting a clear difference in perception.
According to local media on the 14th, President Trump officially notified Japan on the 7th (local time) that a reciprocal tariff of 25% would be imposed starting from the 1st of next month. This is 1% higher than the 24% announced last April. Additionally, a separate 25% additional tariff on automobiles has been in effect since April 3. The total high tariff imposed is 27.5%, including the existing 2.5%.
Automobiles, a representative key industry accounting for about 10% of Japan's total employment population, find it difficult to accept such high tariffs. During the first Trump administration, Japan had concluded a trade agreement by lowering tariffs on US beef and other agricultural products in exchange for the US withdrawing additional tariffs on Japanese cars.
The Japanese government has demanded the withdrawal of a series of tariff measures based on this agreement during ministerial-level consultations that have continued since April, but the US side only wants to make reciprocal tariffs the subject of negotiations, failing to narrow the gap in positions. As President Trump's core goals are reducing the trade deficit and reviving domestic manufacturing, the perception that "it is difficult to withdraw tariffs" is spreading within Japan.
Amidst this, the Japanese government proposed a breakthrough in negotiations by suggesting a plan to apply differentiated tariffs based on contributions to the US economy. It is reported that the European Union (EU) also discussed a similar system with the US in the past. The content was to exempt some tariffs on vehicles produced in the US and exported to third countries.
As of last year, the production volume of cars in the US was 10.79 million units, with Japanese automakers producing 3.28 million units, exceeding 30% of the total. European manufacturers produced 1.82 million units. Japanese car manufacturers produce 300,000 units in the US and export them to third countries, creating employment for about 2.3 million people. In addition to automobiles, the amount of investment in the US has ranked first in the world for five consecutive years. However, it is uncertain whether the past performance will work in favor of the US judgment.
Japan is in a situation where it is difficult to take a response that could be seen as a 'concession' in negotiations with the US ahead of the House of Councillors election to be held on the 20th of this month. Prime Minister Ishiba Shigeru showed a firm stance at a campaign site in Funabashi City, Chiba Prefecture, on the 9th, saying, "This is a fight for national interest. We cannot be underestimated." Ryosei Akazawa, Minister for Economic Revitalization, also emphasized at a press conference on the 8th, "Without an agreement on the key industry of automobiles, it is difficult to conclude a package-type agreement."
In fact, the watershed of the negotiations is likely to pass after the House of Councillors election, but the deadline is approaching quickly. President Trump nailed it through his social media (SNS) Truth Social, saying, "There is no schedule change."
Nihon Keizai Shimbun reported, "The outlook for future negotiations is not bright," and "a new negotiation card that can substantially contribute to resolving the US trade deficit may be required during the negotiation process."

km@fnnews.com Kim Kyungmin Reporter