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After President Donald Trump announced a 25% tariff on Washington’s closest Asian allies, Japan’s most powerful business lobby chief denounced the government in its trade negotiation strategy with the United States.
Takeshi Niinami, the chief executive of Suntory and chairman of the influential Japanese Corporate Executive Association, said that Japan’s claims about Trump’s full exemption from tariffs felt the US president had “betrayed”, adding that the country may have secured a 10% tariff.
“They underestimated Trump’s decision,” Ninami told the Financial Times Tuesday. “They thought that time was on the side of Japan. That was a big mistake.”
He said Tokyo is now on a weaker footing and could be forced to make major concessions to secure the deal. Ninami added that there was a narrow window for the deal to be made before the Senate elections this month.
“It could be too late,” Ninami said.
Japan has quickly launched negotiations this year in the hopes of securing bailouts with a quick transaction from Trump’s tariffs. However, the US president announced 25% tariffs on the country on Monday. This is one percent higher than originally announced in April after talks did not move forward.
Niinami’s unusually blunt comments come hours after Trump outlined new “mutual” tariff levels within the scope of Asian US trading partners, including South Korea, Malaysia, Thailand and Indonesia. Taxation, which previously frozen until July 9th, is scheduled to go into effect on August 1st.
HSBC said on Tuesday that Japan may find it most difficult to offer further concessions. “Ahead of the controversial Senate election on July 20, the Isba control coalition is under great pressure to protect auto exporters, rice farmers and other important constituencies,” he said.
The announcement followed a seemingly unfrugal weeks of negotiations between Tokyo and Washington despite claims by both sides that progress was being made. Last week, Trump accused Japan of being “spoiled” for his promise to buy American rice or refusing to refer American cars to the market.
Ninami said Japan’s stubbornness, including Isba’s refusal to sacrifice the country’s rice farmers to protect the automotive industry, wasted the legacy of the late Prime Minister Shinzo Abe, who enjoyed warm relations with Trump during his first term as the US president.
“Trump had high expectations (and was believed) for Japan for Prime Minister Abe, could become a showcase,” Ninami said. “We had to analyze that level of expectations.”
Japan has consistently requested Trump’s tariff exemption, citing “special relationships” of its allies. According to US and Japanese officials, the trade negotiators in Tokyo were trade negotiators at Entojo Forest, who had been engaged in multiple phone calls and in-person meetings, and were not obligated to grant any basis for tariffs.
Niinami’s criticism was reflected by David Boring, director of Japan and Asia trade at the Eurasian Group think tank, and former US officials who negotiated a trade agreement with Japan that took effect in 2020.
“Japan was badly miscalculated by taking the biggest position that the US must eliminate all tariffs. The strategy was fantasy,” he said. “If Japan wants to reach a deal by August 1st, it needs to be more practical.”
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Akazawa spoke for 40 minutes with U.S. Secretary of Commerce Howard Lutnick, according to Japanese officials who said the Tokyo negotiators were “permanently ready” to fly to Washington for further discussions.
Masakazu Tokura, chairman of the Japan Business Federation, a rival business lobby group known locally as Keidanren, said in May that Japanese negotiators should “take a measured approach by digging in, digging into a sense of resolution and negotiating.”
Ono Ono, director of several major Japanese companies, suggested that the Japanese group has the ability to absorb tariffs due to the weak yen.
“Today, I would be happy to take 145 yen in exchange for customs duties,” he said.
