In a high-profile move signaling the seriousness of America’s trade agenda, President Donald Trump personally stepped into ongoing negotiations with Japanese officials on Wednesday. His presence at the talks, flanked by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, reflects the rising stakes following the economic turbulence triggered by sweeping U.S. tariff announcements.
Trump, whose trade war with China has already reverberated across global markets, now turns to Japan—a close ally and major trade partner—in pursuit of a breakthrough deal.
🚨 Trump touts “big progress” with Japan, a major manufacturing power, on trade.
— johnny maga (@_johnnymaga) April 16, 2025
The markets are about to take off 📈 pic.twitter.com/zinry9gvQv
“Hopefully something can be worked out which is good (GREAT!) for Japan and the USA!” Trump wrote on social media prior to the meeting.
Hours later, he followed up with a triumphant tone: “A Great Honor to have just met with the Japanese Delegation on Trade. Big Progress!”
Strategic Intervention Amid Economic Ripples
Trump’s direct involvement comes in the wake of the administration’s April 2 tariff decision, which sent financial markets into a tailspin and raised alarms about a potential recession. The sweeping tariffs targeted imports across several sectors and nations, with China hit the hardest—facing levies of up to 145%.
Japan, meanwhile, was granted a 90-day temporary reprieve from a looming 24% across-the-board tariff, though a 10% baseline tariff remains in effect. Key Japanese exports such as cars, auto parts, steel, and aluminum still face stiff duties of up to 25%.
The U.S. sees Japan as a critical early test case in proving Trump’s self-professed skills as a dealmaker. As countries scramble to protect their economies, Japan has moved swiftly to the negotiation table. The urgency is heightened by China’s ongoing diplomatic blitz across Southeast Asia, where President Xi Jinping is portraying Beijing as a more stable and cooperative trade partner.
Trade Stakes for Japan and the U.S.
Japan has long maintained low import tax rates—averaging 1.9%—and remains a cornerstone U.S. ally in the Asia-Pacific. However, Trump has criticized the $68.5 billion trade deficit with Japan and is demanding broader market access for American goods. He has also framed tariffs as a way to finance federal budget deficits, further increasing pressure to generate results from these negotiations.
“Japan is coming in today to negotiate Tariffs, the cost of military support, and ‘TRADE FAIRNESS,’” Trump posted Wednesday, making it clear that multiple geopolitical concerns are wrapped into the economic talks.
Japan’s delegation was led by Economic Revitalization Minister Ryosei Akazawa, who met with top U.S. officials in Washington. After the session, Akazawa confirmed that the discussions were constructive and that Japan remains committed to achieving “a win-win deal” that benefits both economies.
He noted that Tokyo is eager for a “comprehensive agreement” and that the next round of ministerial negotiations will take place by the end of this month, accompanied by ongoing working-level talks.
Domestic and International Pressures Mount
While Trump attempts to frame the tariff measures as leverage for better trade deals, criticism is mounting at home. California Governor Gavin Newsom filed a lawsuit on Wednesday, arguing that Trump exceeded his authority by using an “economic emergency” declaration to impose tariffs. Newsom accused the president of causing “economic chaos” and destabilizing key sectors of the economy.
Federal Reserve Chair Jerome Powell added his voice to the concerns, warning that the scale and suddenness of the tariff increases are likely to spur inflation and slow economic growth.
“The level of tariff increases announced so far is significantly larger than anticipated,” Powell said in a speech at the Economic Club of Chicago. “We’re looking at an environment of higher costs and slower expansion.”
For Japan, the stakes are also immense. Prime Minister Shigeru Ishiba has remained diplomatic but firm, stating that retaliatory tariffs are not on the table yet. Instead, his administration is focused on securing exemptions while avoiding rushed decisions that could compromise Japan’s economic and strategic interests.
A task force has been assembled to assess the domestic impact of the U.S. tariffs, and emergency financing options are being considered to support affected industries.
Xi Jinping Capitalizes on U.S. Trade Turmoil
While the U.S. and Japan engage in high-level talks, Chinese President Xi Jinping is touring Vietnam, Malaysia, and Cambodia in a move widely seen as strategic positioning. In Malaysia, Xi described China as a stabilizing force in the region and promised increased market access to Southeast Asian partners.
“In the face of shocks to global order and economic globalization, China and Malaysia will stand with countries in the region to combat the undercurrents of geopolitical confrontation,” Xi said at a state dinner with Malaysian Prime Minister Anwar Ibrahim.
China’s offer to regional allies comes just as it faces steep U.S. tariffs and looks to counter Washington’s growing economic pressure.
Military Spending Puzzle
Trade negotiations between the U.S. and Japan aren’t solely about economics. Trump has repeatedly demanded that Japan increase its contributions to the cost of U.S. military bases in the country—a major point of concern in Tokyo. Japan currently spends around 1.8% of its GDP on defense, and while it plans to increase that to 2% by 2027, Trump is reportedly seeking a jump to 3%.
Such a demand risks straining diplomatic relations at a sensitive moment, though Japan’s leadership has thus far avoided direct confrontation on the issue.
What’s Next?
The outcome of these talks could define the future of U.S.-Japan economic relations and offer a preview of how Trump intends to wield tariff power on the global stage. With the 90-day tariff pause ticking, the clock is running on a potential deal that could ease market tensions and reinforce America’s strategic alliances in Asia.
As Trump prepares to meet with Italian Prime Minister Giorgia Meloni—representing EU concerns on similar tariffs—it’s clear that the administration is engaged in a global high-wire act, balancing economic ambition with international diplomacy.
Whether the “big progress” Trump claims materializes into a signed agreement remains to be seen. For now, both sides are talking—and that alone is being viewed as a step forward in a deeply uncertain trade landscape.
