"Japan may face tariffs of up to 40% if disagreements over tariff agreement persist"

Japanese minister holds 90-minute meeting with US Secretary of Commerce

"Reconfirming the contents of mutual tariff agreements"

It is predicted that if the United States and Japan fail to resolve disagreements over the mutually agreed 15% tariff, some of Japan's exports to the US may be subject to tariffs in the 40% range.

The Yomiuri Shimbun reported on the 7th that if the US and Japan do not resolve differences regarding the mutual tariff agreement, the worst-case scenario is that tariffs in the 40% range may be imposed. Last month, the Japanese government decided in tariff negotiations with the US to apply a 15% mutual tariff to items with previous tariff rates under 15%. For items with pre-existing tariffs of 15% or higher, only the previous tariff rate would apply, with no additional mutual tariff.

However, at the end of last month, the presidential executive order signed by Donald Trump and the Federal Register published on the 6th of this month mentioned that only the European Union (EU) would implement such a method. This raised concerns that Japan's exports might be subject to both the previous tariff rates and an additional 15% mutual tariff.

The Yomiuri Shimbun reported that if the US-announced plan is implemented as is, Japanese textiles with a previous tariff rate of 7.5% would be subject to an additional 15% mutual tariff, resulting in a total tariff of 22.5%. For Japanese beef, which had a previous tariff rate of 26.4%, the total tariff would be as high as 41.4%.

According to the Japanese position, the tariff rate for textiles should be 15% and for beef, it should remain at 26.4%.

The US's mutual tariffs, agreed with most major trading partners, took effect at 1:01 PM Korean time (12:01 AM US Eastern time on the 7th). The mutual tariffs are applied by the US to most items except for specific goods such as automobiles, aluminum, and steel, which are excluded from this policy.

In South Korea's case, most items were already tariff-free due to a Free Trade Agreement (FTA) with the US before the introduction of mutual tariffs. On the other hand, Japan has not signed an FTA with the US. If the method of imposing mutual tariffs on top of the existing ones is adopted, Japan will inevitably be significantly affected. Ryosei Akazawa, Japan's Minister for Economic Revitalization and the lead representative in the US-Japan ministerial-level tariff negotiations, has been visiting Washington, D.C. since the 5th to urge the prompt implementation of the agreement.

According to the Ministry of Foreign Affairs, on the 6th he met with US Secretary of Commerce Howard Lutnick for about 90 minutes to discuss the implementation of the agreements, also requesting swift enactment of the mutually agreed 15% tariff on automobiles.

The Japanese government stated in its press release, "Minister Akazawa reconfirmed the contents of the mutual tariff agreement and immediately requested its implementation." However, no details of Secretary Lutnick’s response were disclosed. After entering the US, Minister Akazawa told reporters, "(The US announcement on mutual tariffs) differs from what I had heard from the US cabinet member," expressing his intention to urge a revision.

In connection with this, Japanese government spokesperson Yoshimasa Hayashi stated at a press conference that day, "We have been confirming with the US side that there are no differences in perception between Japan and the US," and "We will continue to communicate at various levels between the two countries to ensure the faithful implementation of the agreement."

However, when asked whether Minister Akazawa had received American assurance during his meeting with Secretary Lutnick that Japan’s understanding of the agreement was correct, Minister Hayashi did not give a clear answer.

Reporter Subin Park, Hankyung.com waterbean@hankyung.com