U.S. Treasury Secretary Scott Bessent has announced that there are no plans to set specific currency targets in trade negotiations with Japan. Instead, discussions will center on tariffs, non-tariff barriers, and government subsidies. This approach suggests that addressing the U.S. trade deficit with Japan will be a primary agenda item.
Speaking to reporters in Washington on Wednesday, including representatives from the Nikkei, Bessent outlined the strategy for the upcoming negotiations.
He explained that the tariff discussions would proceed in two stages, beginning with a broad agreement on principles, followed by detailed, item-specific negotiations.
Bessent met with Japan’s Minister for Economic Revitalization Ryosei Akazawa on April 16 during Akazawa’s visit to the U.S. He is scheduled to meet with Japanese Finance Minister Katsunobu Kato on Thursday.
On the subject of currency policy, Bessent emphasized that the U.S. is not seeking a currency target or currency agreement aimed specifically at weakening the yen or strengthening the dollar. However, he stated, “We’d expect the Japanese to honor the G7 agreement,” hinting at potential action against currency manipulation such as competitive devaluation.
The primary focus of the U.S.-Japan trade negotiations appears to be the reduction of the U.S. trade deficit with Japan. Bessent indicated that the talks would scrutinize the impact of government subsidies on investment in facilities and employment outcomes, reiterating that reducing tariffs and removing non-tariff barriers are the ultimate goals of all trade negotiations.
Addressing the ongoing U.S.-China tariff dispute, he acknowledged that retaliatory tariffs have reached unsustainable levels. While expressing hope for easing tensions through dialogue, he noted that formal negotiations have yet to commence.
The Trump administration initially threatened Japan with a 24% retaliatory tariff but announced on April 9 that the tariff was revised to 10% for a 90-day grace period.
The U.S. has also imposed a 25% additional tariff on imported vehicles and raised duties on steel and aluminum. Japan is pushing for a complete removal of these additional tariffs, and a future compromise between the two sides is expected to be crucial.
