Japan Seeks Urgent U.S. Exemption from Planned 15% Tariff Hike to Ease Trade Impact

Japan has formally requested that the United States grant it an exemption from a scheduled tariff increase from 10% to 15%, highlighting concerns that the higher tariffs could negatively impact Japan's automotive industry. Following a meeting with U.S. Commerce Secretary Howard Lutnick in Washington ahead of the March 19 Japan-U.S. leaders' summit, Japanese Trade Minister Akira Akazawa told reporters, "We have requested that Japan not be included in any group subject to a 15% tariff hike." He further stressed that Japan's treatment "should not be less favorable than it was under last year's Japan-U.S. agreement." Tokyo's request underscores its worry that higher tariffs could undermine concessions it secured in 2025, particularly for its largest manufacturing sector—automobiles. Although the U.S. Supreme Court has invalidated most of former President Trump's earlier tariff policies, duties on automobiles, steel, and aluminum remain in effect, meaning Japan's gains are vulnerable if the U.S. expands the scope of tariffs. The negotiations are not only about trade balance but also involve the Strategic Investment Initiative (SII), a $550 billion plan designed to channel Japanese investment into U.S. projects. Under the agreement, the U.S. can raise tariffs if Tokyo fails to provide funding on schedule. Japan has committed to providing up to $36 billion for the first round of financing, which includes the construction of a 9.2 GW natural gas power plant in Ohio. Local media reported on Saturday that Tokyo is considering approximately ¥15 trillion ($95.1 billion) for a second round of financing, with nuclear reactors from Westinghouse Electric Company being one of the core projects. Minister Akazawa stated, "We held further in-depth ministerial discussions on the Strategic Investment Initiative and confirmed we will continue to coordinate closely to build future projects together." He added that while progress on the first round of investment was confirmed, "the focus of this meeting was on the second round and subsequent projects."