(Bloomberg) President Donald Trump said he wants the US trade deficit with Japan eliminated during a meeting with Prime Minister Shigeru Ishiba that saw the visiting Japanese leader highlight new potential investments by some of his country’s automotive giants.
“I want to get other countries also to equality with the US in terms of deficits,” Trump said Friday, highlighting his concerns about trade in his first sitdown with the Japanese premier.
Shiba is visiting Washington in a bid to shore up economic and defense links between the two major allies. Trump’s second-term agenda has unnerved not just US adversaries but many longtime partners as well, as the US president threatens tariffs on neighbors Canada and Mexico and demands that nations such as Denmark and Panama hand over territory.
Japan is one of the US’s closest allies and trading partners and Ishiba is eager to avoid any economic fallout from Trump’s sweeping tariff threats and reaffirm his country’s security alliance with Washington. Trump during the meeting also said he would announce reciprocal tariffs next week, marking a major escalation of his trade wars with US partners.
To curry favor with the new president, Japan is looking to pledge new deals. Ishiba said Friday that the CEO of Toyota Motor Corp. shared with him plans to announce more US investments and that Isuzu Motors Ltd. planned to build a plant and create jobs in the US.
Ishiba also agreed to increase imports of US liquefied natural gas and collaborate with Trump on diversifying critical mineral supply chains, according to a joint statement released by the leaders after their meeting.
While Trump hasn’t singled Japan out for tariffs since retaking power last month, he has long held concerns over the country’s trade surplus with the US, the weakness of the yen and the large market share for Japanese carmakers.
The US trade deficit in goods with Japan has shrunk over time. It totaled $68.5 billion last year, making it the seventh-largest bilateral gap. But back in 1999, Japan had the biggest surplus of any economy with the US, at $73.4 billion. Over that same period, the US deficit with China ballooned to $295.4 billion, from $68.7 billion.
Japan has held the largest pile of foreign direct investment in the US for the last five years. In December, Japanese company SoftBank Group Corp. also pledged to invest $100 billion in the US over four years, with Chief Executive Officer Masayoshi Son meeting with Trump at the president’s Mar-a-Lago estate in Florida. SoftBank is also part of a joint venture to spend billions on new artificial intelligence infrastructure in the US.
Trump also addressed another major deal — Nippon Steel Corp.’s contentious offer to buy United States Steel Corp. — which was blocked by former President Joe Biden. Trump indicated that Nippon Steel is considering investing in US Steel, instead of making an outright purchase, offering a potential resolution to a clash over the bid to buy an iconic American firm.
His comments added to investor concerns that the merger agreement is effectively over. The two companies are litigating the decision in court, but it is widely believed that the cases are unlikely to save their deal.
Friday’s meeting posed a leadership test for Ishiba, a relatively inexperienced premier heading a minority government with low approval ratings. He also faced comparisons with the late Prime Minister Shinzo Abe, who had a warm relationship with Trump.
Trump and Ishiba discussed efforts to improve cooperation on energy, defense, artificial intelligence, semiconductors and cybersecurity. Trump said that the US and Japan discussed a pipeline project in Alaska and that Japan would import US LNG shipments “in record numbers.”
Senior administration officials who briefed reporters on the talks between Trump and Ishiba ahead of their meeting had signaled that bolstering foreign investment in the US would be high on the agenda. The officials shared details on the discussions on condition of anonymity.
Security matters were also paramount, in a bid to jointly address threats in the Indo-Pacific region. The leaders agreed to bolster their bilateral presence in Japan’s Southwest Islands, close to Taiwan, and engage in “more realistic” military training and exercises, according to their joint statement.
Ishiba has said he wants to work with Trump to strengthen the US-Japan alliance, particularly as China looks to expand its influence in the region.
The prime minister and Trump restated their “strong opposition” to China’s “unlawful maritime claims” in the South China Sea and shared “serious concerns” over North Korea’s nuclear missile program in their statement. They also agreed to enhance measures for US “extended deterrence,” which is aimed at supporting allies in the event of a nuclear attack.
One source of tension has been Trump’s call for Japan to increase how much it pays for the US military presence on its soil. The President “welcomed” Japan’s plans to boost its defense budget and emphasized Tokyo’s “primary responsibility for defending Japan” in the leaders’ joint release.
. Read more on World by NDTV Profit.Japan is one of the US’s closest allies and trading partners. PM Shigeru Ishiba is eager to avoid any economic fallout from Trump’s sweeping tariff threats. Read MoreWorld
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