US-Japan trade talks see ‘big progress’ as President Donald Trump steps in

In a dramatic show of involvement, US President Donald Trump personally joined trade talks with Japanese officials on Wednesday — a clear sign of the growing stakes for Washington as it scrambles to calm the economic fallout of sweeping new tariffs.

Flanked by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, Trump sat in on discussions that could shape one of the first major trade deals under his renewed presidency. Ahead of the meeting, he took to social media with his trademark flair, writing: “Hopefully something can be worked out which is good (GREAT!) for Japan and the USA!” After the talks, he called it “a great honour” and declared “Big Progress!”

Markets on edge as tariff clock ticks

Trump’s decision to step in directly underscores just how seriously the White House is taking the situation. His tariff hike, announced on April 2, sent markets into panic mode and sparked fears of a looming recession. In a partial retreat, the administration slapped a 90-day pause on the new import taxes — a move that spared Japan from a hefty 24 per cent across-the-board tariff, but still left in place a 10 per cent baseline duty and up to 25 per cent on cars, steel and other key exports.

With Japan’s average tariff rate sitting at just 1.9 per cent and a long-standing alliance with the US, many are watching these talks closely. A successful agreement could send a much-needed signal to jittery investors, anxious American voters, and international allies alike.

China gains ground while allies wait their turn

Meanwhile, China — the US’s chief economic rival — is wasting no time. President Xi Jinping has been on a charm offensive in Southeast Asia, positioning China as a more stable and predictable trade partner, in contrast to the current upheaval in Washington.

Japan is one of the first nations to enter formal negotiations with the US during this 90-day window. Trump’s team claims they’ve been inundated with calls from countries eager to make deals and avoid being hit by further tariffs. Israel and Vietnam have reportedly offered to slash their tariffs to zero, but Trump has remained noncommittal on what that would mean in return.

On Thursday, the US president is due to meet Italian Prime Minister Giorgia Meloni — likely bringing more messages from the EU on how to ease tensions over tariffs imposed on the 27-nation bloc.

Domestic challenges pile up

While Trump pushes for quick wins on the world stage, challenges at home are mounting. California Governor Gavin Newsom filed a lawsuit on Wednesday, accusing the president of overstepping his legal authority by declaring an economic emergency to justify the tariffs. In a statement, Newsom said the policies have thrown the economy into chaos.

Adding to the pressure, Federal Reserve Chair Jerome Powell issued a pointed warning: “The level of tariff increases announced so far is significantly larger than anticipated… The economic effects will likely include higher inflation and slower growth.”

Japan seeks balance — No rush, no concessions

Back in Tokyo, Japan has launched a special task force to gauge the damage and help affected companies. Prime Minister Shigeru Ishiba has been working to secure exemptions for Japan but has publicly said little about what compromises — if any — his government might be willing to make.

Japan’s Economic Revitalisation Minister, Ryosei Akazawa, flew to Washington to lead negotiations. Speaking to reporters before boarding his flight, he said, “I will negotiate in order to firmly protect our national interest.” He added that he hopes to build trust with the US side, especially with Bessent and Trade Representative Jamieson Greer, whom he described as “professionally talented and pro-Japan.”

Akazawa sounded optimistic, saying he believed both countries could reach a “win–win relationship” that supports their national interests. Still, he made it clear Japan views the US tariffs as potentially in violation of international trade agreements — and that Ishiba has no plans to rush toward a settlement that involves giving up too much.