WASHINGTON -- Japan's hopes of securing a trade deal with the U.S. before the current pause on tariffs expires July 9 took another blow Monday, when President Donald Trump described the ally as "spoiled" and hinted that he will send a letter declaring the trade talks over.
"To show people how spoiled Countries have become with respect to the United States of America, and I have great respect for Japan, they won't take our RICE, and yet they have a massive rice shortage," Trump wrote on his Truth Social platform. "In other words, we'll just be sending them a letter, and we love having them as a Trading Partner for many years to come."
The "letter" is a notice he intends to send to all trading partners on July 9, conveying what the tariff rates on their goods will be.
In a Fox News Channel interview that was televised Sunday, the president said the letter will mark "the end of the trade deal."
Japan's top tariff negotiator, Ryosei Akazawa, returned to Tokyo from the U.S. Monday, after the latest round of talks in Washington failed to bring the two sides together on how to resolve the U.S.'s yawning trade deficit with Japan.
Akazawa met with U.S. Commerce Secretary Howard Lutnick for about an hour Friday, then spoke briefly with him again on the phone Saturday.
On Sunday, Akazawa departed for Tokyo without meeting with U.S. Treasury Secretary Scott Bessent or U.S. Trade Representative Jamieson Greer, the two other top negotiators. For now, talks will continue at the working level.
"We will continue to work vigorously to achieve an agreement that benefits both Japan and the U.S. while firmly protecting our national interests," Akazawa told reporters at Tokyo's Haneda Airport after landing.
Akazawa, who serves as minister for economic revitalization, later met with Japanese Prime Minister Shigeru Ishiba at his office to brief him on the status of the negotiations.
David Boling, director for Japan and Asian trade at the political risk consultancy Eurasia Group, said that "the window has probably closed" to reach a deal before July 9.
"Trade negotiations are like sports, and you need momentum," he told a seminar at the Sasakawa Peace Foundation USA here Monday. Akazawa's multiple visits leading up to the Trump-Ishiba meeting on the sidelines of the Group of Seven summit on June 16 had indicated momentum for such a deal.
But with no breakthrough reached, "we've lost the momentum," said Boling, a former negotiator at the Office of the U.S. Trade Representative.
Ishiba will be reluctant to reach a deal, "especially a lopsided deal," ahead of the July 20 upper house election, Boling added, saying that the next opportunity for momentum to recover will be in September, after the summer holiday season.
The sticking point is the Trump administration's objective that Japan reduce its trade imbalance with the U.S. with immediate effect. Tokyo has proposed that the two sides cooperate in areas such as shipbuilding and aviation, but such projects would not lead to a speedy reduction of the U.S. trade deficit.
As a result, the talks have essentially hit a deadlock, with Trump airing his grievances over the trade deficit in the Fox News interview.
"We give Japan no cars, they won't take our cars, and yet we take millions and millions of their cars into the United States," Trump said. "It's not fair."
The U.S, trade deficit with Japan has not changed significantly since the first Trump administration. Trump has urged Japan to immediately increase imports of crude oil and other U.S. goods to eliminate the deficit.
However, Tokyo has maintained that increases of U.S. imports must be in exchange for exemptions from U.S. tariffs on automobiles and other products. But the Trump administration is reluctant to negotiate on sector-specific tariffs, such as the duties on automobiles, steel and aluminum.
During the interview on Fox News, Trump indicated that Japan would remain subject to the 25% auto tariff currently in place. His administration has taken an expansionary approach to tariffs, hiking up rates and expanding the scope of sector-specific tariffs.
The Japanese side has pushed for a reassessment of the tariffs by highlighting Japan's contributions to the U.S. economy.
"Japanese manufacturers make 300,000 vehicles that are exported from the U.S.," Akazawa said.
Japan also offered to cooperate with the U.S. on rare-earth supplies, in response to China's temporary export controls on the resources. But such overtures have not resonated with the Trump administration.
Japan finds itself in a difficult situation. The bargaining chips Tokyo has played so far appear to have been ineffective, with the U.S. once again pressing for Japan to step up imports of goods like farm products and petroleum. It appears that the Trump administration is continuing to ask Japan to lower tariffs on agricultural products.
Those concessions would come at a sensitive time for Japan, which will shortly hold elections for upper house seats. Ishiba is looking to speak with Trump in person, but the next opportunity for meeting at an international forum will not come until fall.
The Trump administration currently imposes a blanket 10% tariff on all countries. Once the July 9 deadline passes, additional tariffs unique to each country are due to go into force.
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