As the July 9th deadline approaches for the United States to end its 90-day suspension of “reciprocal tariffs,” the U.S. has intensified pressure on its trading partners. On June 30, U.S. President Donald Trump expressed disappointment over U.S.-Japan trade talks, criticizing Japan for not buying American rice despite facing a rice shortage. The day before, he had also publicly complained about the “unfair” nature of U.S.-Japan automobile trade. However, both Japan’s Chief Cabinet Secretary and the chief trade negotiator have made it clear that Japan will not seek a trade agreement with the U.S. at the expense of its agricultural sector. The Financial Times reported that hopes for a trade deal between the U.S. and Japan in the short term are fading. Furthermore, U.S. Treasury Secretary Steven Mnuchin has also increased pressure, stating that although he expects a “wave” of trade agreements as the July 9 deadline nears, countries could still face notifications of significant tariff hikes. The New York Times reported that governments around the world are scrambling to negotiate trade deals with the U.S. to prevent the “punitive” tariffs, which could take effect on July 9. However, progress has been slow due to U.S. threats to impose additional tariffs even if agreements are reached. Experts appearing on the Australian Broadcasting Corporation’s program expressed concerns that the U.S. government’s “unworkable” and “absurd” trade policies could lead to more instability and plunge the global economy into chaos.
Trump Expresses Clear Discontent with Japan
According to Reuters, on June 30, Trump protested against U.S.-Japan rice trade. He wrote on the “Truth Social” platform, “I have great respect for Japan, yet they do not accept our rice while they are facing a serious rice shortage.”
However, CNN reported that Trump’s claim that “Japan does not buy American rice” is not accurate. According to U.S. data, Japan purchased $298 million worth of rice from the U.S. last year. From January to April of this year, Japan bought $114 million worth of rice.
In response to Trump’s remarks, the Japanese government stated that it would not sacrifice its agricultural sector to reach a trade deal. According to reports from Japan Broadcasting Corporation (NHK), Asahi TV, and other media outlets, Japan’s Chief Cabinet Secretary Yoshihide Suga stated on July 1, “Japan will continue to actively engage in sincere and candid negotiations with the U.S. with the aim of reaching a mutually beneficial agreement.” However, he emphasized that the Japanese government has no intention of sacrificing agriculture during the negotiations.
On the same day, Japan’s chief trade negotiator and Minister of Economic Revitalization, Yasutoshi Akasaka, who had just completed the seventh round of U.S.-Japan tariff talks, also stated that agriculture is the foundation of Japan’s nation. “In negotiations with the U.S., our stance remains unchanged: we will not engage in talks that sacrifice agricultural interests.”
The Financial Times reported that while the U.S. can export some rice to Japan duty-free, Japan imposes tariffs on any rice imports exceeding 770,000 tons. In April, Japanese media revealed that the Japanese government was considering using the expansion of U.S. agricultural product imports as a bargaining chip in trade talks, which immediately met with strong opposition from Japan’s agricultural sector.
Media outlets such as Reuters have analyzed that agriculture has traditionally been an important constituency for Japan’s ruling Liberal Democratic Party (LDP), led by Prime Minister Shigeru Ishiba, especially with the upcoming key Upper House elections on July 20. Yasutoshi Akasaka also stated on July 1 that creating a safe environment where farmers can continue to work is an extremely important task for both the government and the ruling coalition.
Trump had previously exerted pressure on Japan’s auto industry. In an interview aired on Fox News on June 29, he stated, “They (Japan) don’t accept our cars, but millions of (Japanese-made) cars enter the U.S. This is unfair,” adding, “Japan will have to pay a 25% tariff on cars.”
According to CNN Politics and the Financial Times, in 2024, Japan’s total exports of cars and trucks to the U.S. reached 1.37 million units, while U.S. car exports to Japan are minimal, as Japanese consumers generally believe American car models are too large and fuel-inefficient. Currently, Japan is insisting in trade talks that the U.S. remove tariffs on Japanese-made cars and auto parts, which has led to dissatisfaction among U.S. car manufacturers. Sources indicate that Japan’s chances of receiving any tariff exemptions from the U.S. in the short term seem low. With both sides holding firm, the ruling Liberal Democratic Party (LDP) in Japan now faces the possibility of participating in the Upper House elections without a trade agreement in place.
On July 1, Japan’s TBS television reported that, due to concerns over the lack of progress in negotiations, some Japanese businesses are beginning to adopt new strategies. An auto parts manufacturer stated that if Japanese carmakers move their production bases overseas, orders for auto parts could drop sharply. As a result, the company is preparing to shift its focus to producing daily necessities.
Four Possible Outcomes in U.S.-Europe Negotiations
On June 30, when complaining that Japan does not import American rice, Trump also wrote that the U.S. would send Japan a letter: “We are happy that, for many years to come, they can be our trading partner.” Reuters explained that Trump had said last week that his administration would send letters to some countries before the 90-day suspension period for “reciprocal tariffs” ends on July 9, notifying them that the U.S. would raise tariff rates. At that time, these countries will see their tariff rates revert from a temporary 10% to the 11% to 50% range announced on April 2. On June 29, he further stated that he did not believe there was a need to extend the suspension period.
In this context, on June 30, White House Press Secretary Sarah Huckabee Sanders stated that if countries do not “sit down and negotiate sincerely,” Trump would meet with his trade team to set the new tariff rates. U.S. Treasury Secretary Steven Mnuchin warned that even if countries engage in sincere negotiations, they could still face significant tariff increases on July 9.
According to Bloomberg, citing sources familiar with the matter, the European Union is willing to reach a trade arrangement with the United States that allows the U.S. to impose a unified 10% tariff on most EU exports. However, the EU hopes that the U.S. will apply lower rates for key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft. The EU is also pushing for the U.S. to set quotas or grant exemptions to effectively reduce the 25% tariffs on EU automobiles and auto parts, as well as the 50% tariffs on steel and aluminum. Additionally, the European Commission emphasized that the EU’s Digital Markets Act and Digital Services Act are not up for negotiation in EU-U.S. trade talks.
Reuters quoted an EU diplomat as saying that automobiles are a “red line” for the EU. However, Brussels and Washington have conflicting goals—Trump aims to revive U.S. car manufacturing, while Brussels wants to open markets for its struggling automotive industry.
Bloomberg noted that before next week’s negotiation deadline, there are four possible outcomes for the U.S.-EU talks: reaching a deal that is not fully reciprocal but still acceptable; reaching a U.S.-driven agreement that the EU finds hard to accept; extending the negotiation deadline; or the Trump administration walking away from the talks and imposing new tariffs. If the last scenario unfolds, the EU is likely to respond with full-scale countermeasures.
Have Tariffs Brought U.S. Manufacturing Back?
According to the Financial Times, India is expected to reach a provisional trade agreement with the U.S. as early as this week. The deal is anticipated to protect India’s agricultural market from disruption, although negotiations are still ongoing. To reduce its trade surplus with the U.S., India has agreed to increase imports of American natural gas. Both sides have also agreed to lower tariffs on thousands of products.
In an interview published on June 30 by India’s Financial Express, Indian Finance Minister Nirmala Sitharaman stated that agriculture and dairy are two critical “red lines” in the talks that must be handled with great caution. However, according to Politico, sources familiar with the matter revealed that any deal announced before July 9 is likely only the first phase of the U.S.’s ongoing efforts to reach a substantive bilateral agreement with India—a process that could take at least another year.
According to The New York Times, although governments in India, Vietnam, Japan, the EU, Malaysia, and other economies have been working hard to reach agreements with the U.S., the Trump administration’s ongoing push for tariffs targeting key industries has foreign leaders concerned about future pain—because those same industries, such as steel and automobiles, are also crucial to their own economies.
Politico reported that the White House views tariffs as a blunt instrument to extract concessions from foreign governments—not just on trade, but across a range of other foreign policy priorities. However, it either misunderstands or outright ignores the extent to which domestic politics in those countries shape the discussions, and how those domestic pressures may ultimately outweigh any real economic threat the U.S. can impose.
“Have Trump’s tariffs caused companies to shift production back to the U.S.?” USA Today noted that while the Trump administration claims tariffs are meant to address the offshoring of manufacturing, an April survey by CNBC showed nearly two-thirds of U.S. businesses said building new domestic supply chains would at least double their costs. Additionally, 61% of companies said relocating to countries with lower tariffs would be more cost-effective.
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