【By Observer News, Xiong Chaoran】After multiple rounds of negotiations, Japan hoped to reach a trade agreement with the United States before the tariff deferral period expired on July 9, but this hope has now suffered a major setback — U.S. President Trump described this ally country as "spoiled" and hinted that he would write a letter to Japan, announcing the end of trade negotiations.

On June 30 local time, Trump posted on his self-created social media platform "Truth Social": "I have great respect for Japan, but they refused to accept our rice, despite their own severe rice shortage. To show the world how 'spoiled' some countries are toward the United States, in other words, we will send them only a letter, and we hope to treat them as trade partners for many years to come."

On July 1 local time, "Nikkei Asia" reported that Trump's so-called "letter" was one he planned to send to all trade partners on July 9 to convey the tariff rates on goods. The day before, Trump had also mentioned this letter, which would mark the "end of the trade agreement," during an interview with Fox Business Channel.

Reuters also believes that Trump's latest statement shows disappointment with the U.S.-Japan trade negotiations, while U.S. Treasury Secretary Bensons warned that, despite sincere negotiations, countries may receive notices of "substantial tariff increases" as the deadline of July 9 approaches.

Video screenshot of Trump's interview with Fox Business Channel on June 29

"Nikkei Asia" reported that on June 30 local time, Japan's Minister of Economic Revitalization and Chief Trade Negotiator Akira Akiyama returned to Japan from the United States, after the latest round of negotiations held in Washington failed to reach consensus on how to resolve the massive trade deficit that the U.S. has with Japan.

Last Friday, Akiyama met with U.S. Commerce Secretary Rutenberg for about an hour, and then had a brief phone call on Saturday. On Sunday, without meeting with two main negotiating counterparts, U.S. Treasury Secretary Bensons and U.S. Trade Representative Grayer, he returned to Japan. Currently, the U.S. and Japan will continue to maintain discussions at the working level.

"We will continue to actively work towards reaching an agreement that is beneficial to both Japan and the United States, while firmly protecting our national interests," Akiyama said to reporters upon arriving at Haneda Airport. He then went to the Prime Minister's Office to report on the progress of the negotiations to Japanese Prime Minister Ishiba Shigeru.

David Boling, Director of Japan and Asian Trade at political risk consulting firm Eurasia Group, said that it is unlikely that Japan and the U.S. can reach an agreement before July 9. "Trade negotiations are like sports; you need momentum," Boling, who once served as a negotiator in the U.S. Trade Representative's office, said. "But due to lack of breakthroughs, we've lost momentum." He added that before the July 20 Senate elections, Japanese Prime Minister Ishiba Shigeru will be reluctant to reach an agreement, especially an unequal one, and the next window for pushing negotiations might not appear until later this year.

Japanese media pointed out that the key issue is that the Trump administration is demanding Japan immediately reduce the trade imbalance with the U.S. Although Japan proposed plans for cooperation in areas such as shipbuilding and aviation, these plans are difficult to quickly reduce the U.S. trade deficit. Therefore, Trump expressed dissatisfaction with this trade deficit in an interview, indicating that the negotiations have basically reached a deadlock.

Photo of Japanese negotiator Akira Akiyama visiting the White House in April

On June 29 local time, Trump gave an interview with Fox Business Channel. When asked if he would extend the "reciprocal tariff" exemption period beyond the original deadline of July 9, Trump said he preferred to send letters to countries declaring the end of negotiations, and stated that these countries could continue trading with the U.S. while paying tariffs. "I will write a letter — that's the end of the trade agreement," he said: "I can send one to Japan... That's how it is, you'll pay 25% tariffs on your cars."

Trump criticized the unfair auto trade between the U.S. and Japan, stating that tariffs are paid by importers in the destination country, not exporters. "We don't export cars to Japan," he continued: "They don't accept our cars, yet we transport millions of their cars to the U.S. It's unfair. I explained this to Japan, and they understood. We have a large trade deficit (with Japan), and they also understand that."

Trump said that Japan buying U.S. oil and other products could help reduce the trade deficit, but he seemed more inclined to obtain tariff revenue. He also warned that if other countries imposed 35% or 40% tariffs on American cars, he would raise the 25% car tariff to the same level.

Regarding this, "Nikkei Asia" reported that Trump's remarks shattered Japan's hopes of obtaining tariff exemptions based on its relationship as a "reliable ally" of the U.S.

The report said that the Trump administration announced three sets of tariffs on goods from many countries: one is a 10% "base tariff," another is the so-called "reciprocal tariff" based on the size of the trade deficit, which is currently suspended, and third is a 25% specific industry tariff on cars, steel, and aluminum based on so-called "national security reasons." On April 2 local time, Trump announced that the "reciprocal tariff" for Japanese goods was 24% (including a 10% "base tariff").

"Nikkei Asia" previously analyzed that as a U.S. ally and largest investor, Japan initially tried to seek special tariff exemptions, which may eventually lead to a tougher stance from the U.S.

"The U.S. rushing to negotiate with China is another miscalculation for Japan," the Japanese media pointed out. As one of the negotiation tactics, Japan originally planned to propose to the U.S. that both sides cooperate in areas where the U.S. and China have tensions, such as strengthening the rare earth and semiconductor supply chains. However, the U.S. first reached a framework agreement with China, making Japan's proposal less attractive.

Reuters reported that Trump had previously stated that his team would send letters to some countries before July 9, notifying them of increased tariff rates, at which point the tariff rates would revert from the temporary 10% to the rates announced on April 2. On June 30 local time, White House Press Secretary Levitt said that Trump would meet with his trade team to set tariff rates for countries that did not "sincerely sit at the negotiation table."

The report said that earlier this month, Bensons proposed the idea of extending the deadline for those countries that were genuinely negotiating trade agreements, telling Bloomberg Television that only Trump could decide on such an extension. He added that he expected a "series of" deals to emerge before the July 9 deadline, and tried to continue pressuring trade partners.

"Some countries are negotiating in good faith, but they should realize that if we cannot cross the line because of their stubbornness, we may return to the (tariff rates) from April 2, and I hope this doesn't happen."

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