On the eve of the G7 summit, Japan, the United States, and Canada are stepping up trade negotiations, with automobile tariffs becoming a focal point.

Japan and the United States held another round of trade negotiations in Washington, with officials trying to reach an agreement before the G7 summit in Canada and a meeting between U.S. President Trump and Japanese Prime Minister Shizo Abe. Japan's chief trade negotiator, Ryosei Akazawa, met separately with U.S. Commerce Secretary Lighthizer for 70 minutes and with Treasury Secretary Mnuchin for 45 minutes on Friday. Just hours before the negotiations, Abe, after talking with Trump, stated that Japan is continuing to urge the U.S. to lift tariffs. Akazawa said after the sixth round of trade talks, "In order to achieve a mutually beneficial agreement, we had very in-depth discussions with the two ministers and explored the possibility of reaching an agreement." "We further deepened discussions on issues such as expanding bilateral trade, non-tariff measures, and economic security cooperation." Akazawa declined to reveal whether a path to an agreement had been seen or to comment on whether Abe and Trump will announce an agreement during the G7 summit starting on Sunday. He said he may accompany Abe to Canada. After talking with Trump previously, Abe stated that both sides had agreed to expedite negotiations for a mutually beneficial agreement and would meet in Canada. Japan faces significant risks from Trump's series of trade tariff policies, especially as the Japanese economy faces a technical recession and with national elections approaching. The U.S. government has imposed a 25% tariff on imported cars and parts, and a 50% tariff on steel and aluminum products. A 10% uniform tariff on other goods from Japan is set to increase to 24% on July 9 unless an agreement is reached. With cars and their parts accounting for one-third of Japan's exports to the U.S., and the automotive industry being one of Japan's largest sources of employment, tariffs related to cars are expected to have the most serious impact on the Japanese economy. Earlier this week, Trump suggested further increasing car tariffs, putting even more pressure on major Japanese car manufacturers and their extensive supply chain and related businesses. Toyota, Honda, Nissan, and other Japanese carmakers have already forecast a cumulative reduction in profits of over $19 billion for the fiscal year due to the current tariffs. Akazawa stated that Japan is trying to avoid further increases in car tariffs through bilateral negotiations with the U.S. He did not disclose more details of the latest negotiations, only stating that Japan is still committed to reaching a comprehensive trade agreement. He also said he had briefed Abe on the latest progress in the negotiations but refused to disclose specifics. In another related development, Trump has officially begun the process to approve Nippon Steel's acquisition of a U.S. steel company. The U.S. government submitted a proposed national security agreement to the two companies on Friday, indicating that the deal will be approved as long as the companies adhere to the government's terms. Japanese Economy, Trade and Industry Minister Yoichi Muto stated after the announcement at the White House, "The Japanese government believes that this investment will enhance the innovative capabilities of the Japanese and American steel industries and help strengthen the close partnership between Japan and the United States." Progress in this deal is seen as a positive signal that the Trump administration may welcome Japanese investments in the U.S., especially those that can ensure or create American jobs. Japan has always emphasized its good record as the largest foreign investor in the U.S. during the process of negotiating an agreement with the Trump administration. As for the timing of a U.S.-Japan trade agreement, Akazawa stated that Mnuchin did not mention whether the deadline for negotiations would be extended in the latest round of talks. Earlier this week, Mnuchin hinted that the 24% retaliatory tariff scheduled for July 9 may be delayed for countries negotiating in good faith. When asked if Abe and Trump will announce an agreement during the G7 summit, Akazawa did not give a direct answer. He said, "Sometimes negotiations can suddenly lead to an agreement, or they can unexpectedly drag on. It's like being stuck in a fog. Sometimes the fog suddenly clears in the morning, and sometimes it lingers for a long time. Therefore, I prefer to avoid making any premature comments."