Media reports: During the tariff negotiations, U.S. officials have begun to argue among themselves.

Source: Financial Alliance.
Author: Shi Zhengcheng

During the fifth round of U.S.-Japan tariff negotiations, Japanese media reported that there are significant differences among U.S. Treasury Secretary Basent, Commerce Secretary Lutnik, and Trade Representative Jameson Greer, who are responsible for negotiating with Japan, to the extent that they left the Japanese representatives aside during negotiations and openly debated among themselves.

This chaotic situation has made it difficult for the Japanese side to determine the true intentions of the Trump administration.

According to an informed source: "There was a moment during the negotiations when the three U.S. Cabinet officials paused discussions with the Japanese officials and directly argued in front of the Japanese."

Another source close to the Japanese government stated, "These three officials are competing for credit." He speculated that all three were attempting to please Trump and were exerting pressure on Japan for concessions during the negotiations.

It is well known that Basent and Lutnik were competitors for the position of U.S. Treasury Secretary, and their positions on tariff issues do differ.

As a "person from Wall Street," former hedge fund head Bessent is seen as a moderate. According to reports, he was also a key figure in persuading Trump to postpone some "reciprocal tariffs" for 90 days. On the other hand, Lutnick is a hardliner who has publicly stated that even if imposing tariffs leads to an economic recession, it is "worth doing."

Greeley is superficially in charge of U.S. trade policy, but his role has somewhat diminished during Trump's second term. The U.S. president even described Lutnick as the official responsible for the Office of the U.S. Trade Representative.

The reports also point out that, in addition to the lack of consensus among the three overlapping U.S. officials, Japan is also concerned about communication issues at various levels of the U.S. government. Generally speaking, trade negotiations are divided into three levels: the working level addresses technical issues, the cabinet level finalizes the details, and ultimately agreements are made by the heads of state.

According to a senior Japanese economic official, "The three levels of the U.S.—the working level, cabinet officials, and the president—are disjointed, and information seems not to be shared."

He added that the Japanese side often has to repeat the same content in discussions at the working level and cabinet level.

However, Japan has experience dealing with such confusion. During the U.S.-Japan economic talks in the 1990s, the U.S. trade representative needed to negotiate separately with Japan's Foreign Minister, Minister of Economics, Trade and Industry, and Finance Minister, and there were also barriers between departments. Therefore, since the TPP agreement negotiations began, Japan has centralized negotiation authority under one minister.

It is reported that Japan's chief tariff negotiator, Akizawa Ryoji, had a meeting with U.S. Trade Minister Lutnick for about two hours on Thursday. The Japanese government stated in a press release that Akizawa Ryoji once again "strongly" urged the U.S. side to reconsider a series of tariff policies during the meeting. According to the schedule, Akizawa Ryoji will meet with Bessent again on Friday.

In addition to advancing tariff negotiations, another task for Akizawa Ryoji is to promote a meeting between the leaders of the two countries during the G7 meeting in Canada in mid-June.

According to the so-called "reciprocal tariff" system announced by Trump on April 2, in addition to a 10% baseline tariff, Japan also has to bear an additional 14% country-specific tariff, resulting in a total tax rate of 24%. For Japan, which relies on the Autos Industry, the impact of Trump's 25% tariff increase on auto imports is particularly significant.

Editor/melody