“We were able to have concrete discussions on topics such as expanding our bilateral trade, non-tariff measures, and cooperation on economic security,” Akazawa said to reporters on Thursday in Washington after the gathering. “We agreed to arrange a date for the next high-level meeting, aiming to accelerate the talks from mid-May.”
Akazawa said he reiterated Japan’s stance that US President Donald Trump’s wide-ranging tariff campaign was “extremely regrettable” while repeating Tokyo’s plea that the tariff measures be revisited.Read More: Bank of Japan keeps rates unchanged as tariffs cloud outlook
A new angle on the talks emerged earlier Friday when Finance Minister Katsunobu Kato hinted at the possibility of citing Japan’s vast holdings of US Treasuries for leverage in discussions, although it’s unclear how serious he was about the idea.
“It does exist as a card,” said Kato, speaking on a TV Tokyo program Friday. “Whether or not we use that card is a different decision.”
Kato’s remark struck a different tone from views expressed in April by the ruling party’s policy chief, Itsunori Onodera, who said Japan, as an ally to the US, would not intentionally take action against US government bonds.
There’s no indication that the matter of Japan’s foreign reserves came up during Akazawa’s meeting in Washington. The participants didn’t discuss foreign exchange, national security or China, he said.
Akazawa said he hopes the acceleration in the negotiations will allow Trump and Japanese Prime Minister Shigeru Ishiba to reach an agreement in June.
“It is not simply a matter of speed, as there are national interests that must be protected on both sides, which will take some time,” Akazawa said. “There are still many issues that need to be addressed and resolved before a final agreement can be reached.”
In mid-June, the two leaders could meet for talks on the sidelines of the summit of the Group of Seven nations in Canada before the 90-day pause on the so-called reciprocal tariffs ends in early July.
Nations around the world are watching to see how Japan fares in its efforts to get a reprieve from tariffs that Trump hopes will close US trade deficits with its trading partners. India finalised terms of reference for a bilateral deal last week, Bloomberg reported, while Bessent said that Washington and Seoul could reach an “agreement of understanding” as soon as this week, though Seoul has said that is unlikely.
Akazawa said an agreement with the US will have to be a package deal.
Japan stands to be hit hard by US trade policies. A 25% levy on US imports of steel and aluminium started in March, with a similar tax on autos and a baseline 10% tariff on all goods kicking in earlier this month. The auto tariffs would hit the core of the nation’s industry in particular, although Trump took steps to ease the impact of those duties earlier this week.
“One Japanese carmaker is already losing $1 million an hour,” Akazawa said, without elaborating.
Protecting Japan’s interests and jobs will be crucial for Ishiba ahead of a national election in July. Last year cars and car parts accounted for a little over one-third of Japan’s exports to the US, its biggest export destination, while farmers have consistently offered strong support for his ruling Liberal Democratic Party in rural areas.
“Autos and agriculture are both important economic sectors with many people relying on them for their livelihoods,” Akazawa said. “It is entirely natural that some people may feel anxious about the Japan-U.S. negotiations, and we are fully aware of this. We have no intention of engaging in negotiations that would harm our national interests.”
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