Japan’s top trade negotiator, Ryosei Akazawa, unexpectedly cancelled a visit to the United States on Thursday, delaying crucial talks meant to finalise a $550 billion investment package. The deal, which Tokyo is offering in exchange for relief from steep tariffs imposed by Washington, has been under discussion for months but remains mired in uncertainty as both sides seek clarity on key terms.
The package, announced in July, was tied to an agreement to reduce tariffs on Japanese imports to 15 percent. In return, Japan pledged large-scale investments in the US economy through government-backed loans and guarantees. While President Trump has described the funds as “our money to invest” and suggested that the United States would secure 90 percent of profits, Japanese officials have been firm in stressing that the investments must also provide benefits to Japan.
The cancellation underscores lingering tension over tariff relief. According to government spokesperson Yoshimasa Hayashi, Akazawa’s trip was postponed after talks revealed that “points need to be discussed at the administrative level.” Tokyo has consistently maintained that before committing to the investment plan, Washington must amend presidential executive orders to prevent overlapping tariffs, especially on sensitive goods like beef.
American officials have promised to issue revisions. One order would ensure that the agreed 15 percent tariff does not compound existing higher duties on certain Japanese exports. Another executive order is expected to reduce tariffs on Japanese automobiles, lowering them from 27.5 percent to 15 percent. However, Washington has not provided a timeline for when these measures will be enacted, leaving Tokyo wary of finalising the investment package prematurely.
Japan’s hesitation is also driven by its weakening trade performance. In July, exports to the United States recorded their sharpest monthly decline in four years, reflecting the toll of ongoing tariff disputes. The downturn forced Tokyo to cut its annual growth forecast from 1.2 percent to 0.7 percent, a sign of how trade tensions are weighing on the broader economy.
For Japan, the investment deal is more than a financial commitment—it is part of a broader strategy to safeguard its trade relationship with the US while ensuring domestic industries are not undermined. Officials are pressing Washington not only to clarify profit-sharing terms but also to issue binding commitments on tariff reductions for both cars and auto parts, two of Japan’s most vital export sectors.
Despite the setback, Akazawa could still travel to Washington as soon as next week if the unresolved issues are settled. Both governments are under pressure to deliver a clear framework that balances Trump’s focus on American profit with Japan’s insistence on fair treatment and mutual economic gain. Until then, the fate of the $550 billion investment package remains uncertain, hanging on the outcome of sensitive negotiations that could reshape trade ties between the two allies.
