Japan may expand imports of U.S. corn to ease tariff pressure

Japanese Prime Minister Shigeru Ishiba stated in the Diet that Japan will not sacrifice its agricultural interests to换取 lower auto tariffs from the United States. However, he hinted that increasing imports of U.S. corn, especially for biofuel use, could become a compromise option. Reuters pointed out that compared to increasing rice imports, buying more corn is less controversial for Japan, as Prime Minister Ishiba's ruling Liberal Democratic Party (LDP) heavily relies on the support of rice farmers in elections.

Prime Minister Shigeru Ishiba said on Monday, May 12, that increasing imports of corn from the United States would be one of the options in trade negotiations with Washington. However, he warned that Japan will never sacrifice its agriculture to obtain lower auto tariffs.

In the previous two rounds of trade talks with the United States, progress was minimal. Tokyo sought tariff exemptions, including the 25% high tariff on Japanese autos, which are the main export commodity to the U.S.

In the first round of negotiations last month, U.S. negotiators mentioned autos and rice as areas where Japan sets market barriers.

Compared to increasing rice imports, buying more corn is less controversial for Japan because Prime Minister Ishiba's ruling Liberal Democratic Party (LDP) heavily relies on the support of rice farmers in elections.

Prime Minister Shigeru Ishiba reiterated in his Diet speech that Japan will not sacrifice its agriculture to换取 concessions on auto tariffs from the U.S.

Shigeru Ishiba said that Japan can use corn for ethanol fuel production instead of food use. "Using it as biomass energy aligns with national interests," Shigeru Ishiba added, noting that Japan's soil is not suitable for growing corn. He also said, "We hope to have an in-depth discussion on whether corn should be used for table consumption or energy." However, he did not provide details.

The U.S. exported $2.8 billion worth of corn to Japan in 2024 to offset the impact of an 80% decline in exports to China.

Japanese Chief Trade Negotiator Akira Agata stated at the same session of the Diet that the determination to request the U.S. to cancel all tariffs imposed by the Trump administration will not waver.

Japan seeks to hold the third round of bilateral ministerial trade negotiations later this month, and these talks may be influenced by the tariff-cutting agreement reached between China and the U.S.

According to sources, Japan may also propose technical cooperation in shipbuilding to the U.S., confirming earlier domestic media reports.

Japanese policymakers and members of the ruling party said that if the U.S. does not cancel the 25% tariff on Japanese auto imports, there is no reason for Japan to reach an agreement with the U.S., as the industry has a significant impact on Japan's export-oriented economy.

This impact has already been evident in the Japanese auto industry. Mazda reported a 45.1% drop in net profit for the fiscal year ended March and postponed the announcement of its earnings forecast for the fiscal year ending March 2026.

On April 2, U.S. President Donald Trump announced a 10% tariff on all countries except Canada, Mexico, and China, while imposing higher tariffs on major trading partners such as Japan. Japan will face a 24% tariff starting July unless it reaches an agreement with the U.S.

Source: Reuters

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