Japan More Likely to Seek Negotiation Than Retaliation Regarding US Tariffs, Expert Says
Japan will likely seek negotiation and exceptions to U.S. tariffs rather than respond with retaliatory measures, one expert predicted at an event hosted by Japan House LA on March 10.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Whereas China has "retaliated and then negotiated," after pressure from the U.S., such action has "never been the playbook of Japan," said Saori Katada, a professor of international relations at the University of Southern California. Rather, she said, the response has been to "seek a negotiation, to seek exclusion."
This strategy, which worked for Japan during the first Trump administration, may not be successful this time around, according to Katada: "My sense is that it's going to be very difficult to obtain an exception at this point." She noted that Trump already has issued executive orders "precisely to eliminate all exceptions" to tariffs on aluminum and steel from his first term.
She said that Japanese Prime Minister Shigeru Ishiba is likely to make the case for exceptions by "highlighting the enormous contributions that Japan makes to the American economy, through investment, through trade ties, and how Japan is a key partner in economic security."
Katada said that she thinks "that Japan might also pursue a negotiation" for updated free trade agreements, and could point to the passage of two such FTAs in Trump's first term, the U.S.-Japan Market Access Agreement and the U.S.-Japan Digital Trade Agreement.
However, should negotiations fail, Katada said, Japan could pivot to other strategies: "I also think Japan will double down on its diversification strategy." She noted that the first Trump administration pushed Japan to become "a leader of free trade as a response to the rise of protectionism" and passed FTAs like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Regardless of how trade relations in the region play out, Katada said, Japanese retaliation is unlikely: "What I don't expect you'll see is Japan retaliating."