Japanese trade negotiations walk a tightrope: avoiding tariffs, rejecting sides, and seeking strategic balance.

In the midst of increasingly intense economic competition between the United States and China, Japan is playing out a delicate trade balancing act. Multiple Japanese officials have revealed that while Japan is eager to resolve the US-Japan trade dispute before the 90-day tariff exemption period expires, it firmly refuses to join any possible US-led efforts to contain China. To permanently exempt Japanese automobiles and Shenzhen Agricultural Power Group from the tariffs proposed by the Trump administration, Japan's chief trade negotiator, Ryoji Takezawa, is set to travel to the US again for negotiations with the goal of reaching a final agreement around the time of the G7 summit in June. However, the "additional conditions" proposed by the US have put Japan in a difficult position - reports indicate that the US is considering requiring countries granted tariff exemptions to synchronously cut economic ties with China in order to increase pressure on China. However, this requirement directly impacts Japan's core interests. China, as Japan's largest trading partner (accounting for over 20% of Japan's total trade), is not only a crucial source of imports, but also represents a market where Japanese companies have invested deeply for many years. Toyota announced this week that it will invest $2 billion to open a new factory in Shanghai by 2027, which is the latest testament to Japanese companies' commitment to the Chinese market. Although the US has not yet explicitly demanded economic decoupling from China, Japan has already taken an independent stance on sensitive issues such as chip exports. The lessons learned from China's rare earth export ban in 2010 have prompted the Japanese industry to invest heavily in establishing alternative supply chains in countries like Australia. Now that China has once again placed rare earths on its export control list, Japan must navigate its relationship with China even more carefully. As the US's only formal security ally, Japan is deeply reliant on US forces stationed in Japan for defense, but its economic ties with China are becoming increasingly intertwined. Yuichi Niiyama, a political science professor at the University of Tokyo, bluntly stated: "A decrease in trade volumes between China and the US would be a disastrous blow to Japan." This contradiction becomes even more acute when Trump demands that Japan increase its contribution to hosting US forces. Caught between strategic pressures, Japan has chosen to "walk on two legs." On one hand, it is accelerating efforts to advance frameworks like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which aim to decrease dependence on China. On the other hand, it is using the ruling party's secretary general, Toshihiro Nikai, to convey a letter supporting China's stance on a multilateral trade system. As the US attempts to weaponize economic issues, Japan's choices not only impact short-term tariff exemptions, but also the overall supply chain in the Asia-Pacific region. The success of this delicate trade balancing act will determine whether Japan can maintain strategic autonomy in the global trade dispute over tariffs.