On the morning of Wednesday, July 23, somewhat surprising news broke: the U.S.-Japan tariff negotiations had reportedly reached a conclusion. For our company, which operates a cross-border e-commerce business, this tariff negotiation has been one of the top concerns. However, as of now, it seems that no official agreement document has been drafted between the U.S. and Japan, and the Japanese government has even stated that no such document will be prepared. This is an unprecedented situation in terms of diplomatic norms, with both sides presenting their subtly different interpretations through social media, impromptu press briefings, and television appearances, leaving many details of the actual agreement still unclear.
Particularly regarding the reported $550 billion (80 trillion yen) investment from Japan into the U.S., it is said that 90% of the profits generated will be returned to the U.S. side. Although reciprocal tariffs and tariffs on automobiles have reportedly been lowered to 15% from the initial figures, the current terms are far too one-sided in favor of the United States. If this is indeed considered a “deal,” it can only be interpreted as a complete defeat for Japan in these negotiations. Furthermore, U.S. Treasury Secretary Bessent has added that the U.S. will review the implementation of the agreement every quarter, and if they deem the execution insufficient, there is even the threat that tariffs may be raised again.
Given the crushing defeat of the Ishiba administration in the recent House of Councillors election and its precarious grip on power, will it be able to provide an explanation during the extraordinary Diet session starting on August 1 that will convince the Japanese public of the legitimacy of this agreement?