US Treasury Secretary Scott Bessent Visits Japan But Skips Tariff Talks As Trump’s Aug. 1 Deadline Looms

U.S. Treasury Secretary Scott Bessent will meet Japanese Prime Minister Shigeru Ishiba on Friday but will not discuss tariffs, despite Japan’s efforts to restart stalled negotiations ahead of a looming Aug.1 deadline.

Bessent, one of the U.S.'s lead tariff negotiators, arrived in Japan on Thursday and will attend the U.S. National Day at World Expo 2025 in Osaka on Saturday, Nikkei reported.

Japan’s top negotiator Ryosei Akazawa would accompany Bessent in hopes of resolving the differences.

Akazawa last visited Washington in June but was unable to meet with Bessent due to the latter’s preoccupation with advancing President Trump’s spending and tax bill. 

The U.S. continues to demand that Japan reduce its $69 billion trade deficit with the Asian nation. At the same time, Japan has offered collaboration in areas such as shipbuilding—an offer that Washington has rebuffed.

The U.S. plans to impose new 25% "reciprocal" tariffs on Japan, effective Aug.1, on top of existing 10% universal tariffs and duties on steel and aluminum. 

Despite Tokyo’s push to eliminate auto tariffs, Washington has shown little willingness to make concessions. 

That said, signaling the willingness of the U.S. to maintain status quo, Bessent has acknowledged the constraints with which Japan is operating on account of the imminent upper house elections.

Meanwhile, fresh trade data has highlighted the economic toll of U.S. tariffs on Japan. 

Exports from Japan fell 0.5% in June, defying economists’ expectations of a rise, with auto shipments to the U.S. plunging 26.7% year-on-year. 

Overall exports to the U.S. dropped 11.4%, fueling fears of a recession. 

Stefan Angrick at Moody’s Analytics, warned that the escalating tariff regime could shave up to 1% off Japan’s GDP if no deal is reached.

The U.S. is in no rush, having already collected $10.7 billion from auto tariffs by June.

After the July 21 election, Ishiba’s government will have less than two weeks to reach a deal, but may face internal limits on making key trade concessions.

On Stocktwits, retail sentiment for both the iShares MSCI Japan ETF (EWJ) and the SPDR S&P 500 ETF Trust (SPY) was ‘neutral’, with message volume rated ‘high’ for EWJ and ‘normal’ for SPY.

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