Stocks surge as Japan poised for priority in US-led trade talks

WASHINGTON: In Washington, Japan is poised to take precedence in upcoming US tariff negotiations as it moves to the forefront of numerous nations seeking to roll back President Donald Trump’s so-called reciprocal tariffs, which are due to come into effect on Wednesday. Treasury Secretary Scot Bessant announced that Japan would likely be prioritized due to its prompt engagement in the discussions, which will be led by Bessant and US Trade Representative Jamieson Greer.

This initiative for bilateral trade talks comes after Japanese Prime Minister Sigeru Ishiba held a cabinet meeting on Tuesday to address the tariffs. His administration has designated Economic Revitalisation Minister Ryosei Akazawa to head Japan’s negotiation delegation. Ishiba emphasized his concerns about the detrimental effects the US tariffs could have on Japan’s substantial auto industry, stating, and “The auto industry is a vital component of our economy. These tariffs could have a significant negative impact on various sectors.”

Trump recently imposed a 24 percent reciprocal tariff on Japan, in addition to a 25 percent auto duty that started last week. Ishiba expressed apprehensions about the compatibility of these tariffs with World Trade Organization (WTO) agreements and the Japan-U.S. Trade Agreement.

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Following the news, Japanese stocks surged on Tuesday, with the broader Topix index climbing 7.2 percent and the Nikkei 225 Stock Average increasing by 6.8 percent, marking the largest intraday gains for both since August. US futures for the S&P 500 and Nasdaq 100 also rose. This came after a conversation between Trump and Ishiba, during which Ishiba noted that these tariff measures would limit Japanese companies’ ability to invest in the US Trump has countered that his tariffs are intended to encourage companies to relocate their manufacturing operations to America.

Bessant, in remarks on Fox Business, indicated that Japan has significant non-tariff barriers but anticipated fruitful negotiations with the country. He noted there are around 50 to 70 other nations that have also approached the US regarding tariffs, indicating that the upcoming months—April, May, and possibly into June—would be particularly busy.

Bessant highlighted Japan as a critical military and economic ally, stating, “The US has a long history with them. I expect Japan will be prioritised because of their prompt response.”

While Japan is being prioritized in these trade discussions, China faces a strikingly different situation. Trump has warned of imposing an additional 50 percent tariff on Chinese goods if Beijing does not address what he has termed “long-term trading abuses.” This could significantly impact the pricing of imports from the U.S.’s third-largest trading partner.