After the trade deal with the US, Tokyo has made a big clarification on $550 billion fund. As per Bloomberg, Japan has revealed that just 1–2 per cent of the recently announced $550 billion US–Japan investment framework will be in the form of actual investment, with the overwhelming majority structured as loans and loan guarantees. That’s according to Ryosei Akazawa, Japan’s chief negotiator, who addressed the details on NHK over the weekend in an attempt to defuse public criticism of the deal.&nbsp;The fund, a key pillar of Japan’s trade agreement with the Trump administration, was initially seen as a massive financial commitment to the US. However, Akazawa clarified, “It’s not that $550 billion in cash will be sent to the US.” Instead, most of it will be financing through Japanese-backed institutions, which would earn interest and guarantee fees.&nbsp;According to Akazawa, actual investments in the US will total just $5.5 billion to $11 billion, with Tokyo and Washington agreeing to a 90-10 profit split, heavily favouring the US. Japan had reportedly proposed a 50-50 ratio, but compromised in order to secure broader trade concessions. “For that part, Japan’s just making money,” Akazawa said about the loan guarantees, noting that unless a default occurs, Japan simply collects fees, as per Bloomberg.<h2>Tariff relief saves Japan ¥10 trillion</h2>Despite the lopsided investment structure, Japan expects to save ¥10 trillion ($68 billion) through lower US tariff rates, especially on automobiles and industrial exports. According to Bloomberg, under the new trade terms, the US will impose 15 per cent universal tariffs on most Japanese goods, including cars, replacing higher and often unpredictable levies. Akazawa said he expects the tariff reduction to take effect as early as August 1, even though a joint implementation document between the two countries has not been signed. Instead, Tokyo is urging the US to issue an executive order to enact the tariff cuts quickly. “If you say something like, ‘Let’s create a joint document,’ they will say, ‘We’ll lower tariffs after the document is created,’” Akazawa noted. “We will demand that they issue an executive order to lower tariffs as soon as possible," as quoted by Bloomberg.&nbsp;According to Bloomberg, the fund isn’t limited to Japan–US cooperation. Akazawa highlighted that non-Japanese firms operating in the US, such as a Taiwanese semiconductor company, could also benefit from the financing. The broader aim, he said, is to support manufacturing and tech capacity building in the US, while still securing gains for Japanese lenders. The US–Japan agreement came just days before Washington announced a similar trade pact with the European Union, which includes a $750 billion LNG purchase plan and $600 billion in European investment into the US. The Trump administration is positioning both deals as templates for global trade reset under its “America First” policy.<h2>Public backlash and Akazawa’s defence</h2>Akazawa’s public remarks appeared to be a pre-emptive response to growing domestic criticism, with opposition figures accusing the government of “selling out” Japan. But the chief negotiator insisted that the actual risk to Japanese taxpayers is limited, given the conservative structure of loans and guarantees.&nbsp;“People are saying various things, such as ‘You sold out Japan,’ but they’re wrong,” he said, as quoted by Reuters.&nbsp;<h2>What’s next?</h2>Key questions remain unanswered, including when the investment mechanism will launch, how the funds will be allocated, and what sectors will be prioritised. With just months left in President Donald Trump’s second term, Japan hopes to finalise the framework within this political window.&nbsp;Until then, officials from across Asia and Europe are watching closely, trying to assess whether Washington’s new tariff-plus-investment model is a fair deal or a strategic trap.&nbsp;(With inputs from the agencies)

Ryosei Akazawa, Japan chief negotiator, mentioned that this fund aims for $5.5 billion to $11 billion in real investments, with a 90-10 profit split favoring the US. Japan anticipates saving ¥10 trillion through reduced tariffs, particularly on automobiles. 

After the trade deal with the US, Tokyo has made a big clarification on $550 billion fund. As per Bloomberg, Japan has revealed that just 1–2 per cent of the recently announced $550 billion US–Japan investment framework will be in the form of actual investment, with the overwhelming majority structured as loans and loan guarantees. That’s according to Ryosei Akazawa, Japan’s chief negotiator, who addressed the details on NHK over the weekend in an attempt to defuse public criticism of the deal. The fund, a key pillar of Japan’s trade agreement with the Trump administration, was initially seen as a massive financial commitment to the US. However, Akazawa clarified, “It’s not that $550 billion in cash will be sent to the US.” Instead, most of it will be financing through Japanese-backed institutions, which would earn interest and guarantee fees. According to Akazawa, actual investments in the US will total just $5.5 billion to $11 billion, with Tokyo and Washington agreeing to a 90-10 profit split, heavily favouring the US. Japan had reportedly proposed a 50-50 ratio, but compromised in order to secure broader trade concessions. “For that part, Japan’s just making money,” Akazawa said about the loan guarantees, noting that unless a default occurs, Japan simply collects fees, as per Bloomberg. Tariff relief saves Japan ¥10 trillion Despite the lopsided investment structure, Japan expects to save ¥10 trillion ($68 billion) through lower US tariff rates, especially on automobiles and industrial exports. According to Bloomberg, under the new trade terms, the US will impose 15 per cent universal tariffs on most Japanese goods, including cars, replacing higher and often unpredictable levies. Akazawa said he expects the tariff reduction to take effect as early as August 1, even though a joint implementation document between the two countries has not been signed. Instead, Tokyo is urging the US to issue an executive order to enact the tariff cuts quickly. “If you say something like, ‘Let’s create a joint document,’ they will say, ‘We’ll lower tariffs after the document is created,’” Akazawa noted. “We will demand that they issue an executive order to lower tariffs as soon as possible," as quoted by Bloomberg. According to Bloomberg, the fund isn’t limited to Japan–US cooperation. Akazawa highlighted that non-Japanese firms operating in the US, such as a Taiwanese semiconductor company, could also benefit from the financing. The broader aim, he said, is to support manufacturing and tech capacity building in the US, while still securing gains for Japanese lenders. The US–Japan agreement came just days before Washington announced a similar trade pact with the European Union, which includes a $750 billion LNG purchase plan and $600 billion in European investment into the US. The Trump administration is positioning both deals as templates for global trade reset under its “America First” policy. Public backlash and Akazawa’s defence Akazawa’s public remarks appeared to be a pre-emptive response to growing domestic criticism, with opposition figures accusing the government of “selling out” Japan. But the chief negotiator insisted that the actual risk to Japanese taxpayers is limited, given the conservative structure of loans and guarantees. “People are saying various things, such as ‘You sold out Japan,’ but they’re wrong,” he said, as quoted by Reuters. What’s next? Key questions remain unanswered, including when the investment mechanism will launch, how the funds will be allocated, and what sectors will be prioritised. With just months left in President Donald Trump’s second term, Japan hopes to finalise the framework within this political window. Until then, officials from across Asia and Europe are watching closely, trying to assess whether Washington’s new tariff-plus-investment model is a fair deal or a strategic trap. (With inputs from the agencies)

Tokyo clarified that only 1-2% of the $550 billion US-Japan investment framework will consist of actual investments, with most being loans and guarantees.

Japan says only 1–2% of $550 billion US fund is actual investment

US President Donald Trump on Tuesday (Jul 22) declared that Washington had reached a "massive" new trade agreement with Japan, a deal he claimed would bring billions in investments and create "hundreds of thousands of jobs" in the United States. Even as Trump, in his usual 'go big, or go home' fashion, touts what he referred to as 'perhaps the largest deal ever made,' Tokyo has signalled caution. In a statement, Japanese Prime Minister Shigeru Ishiba said he would review the details before offering any official comment. "As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement," Ishiba told reporters in Tokyo after Trump's announcement.<h2>'Largest Deal' between US and Japan</h2>Trump, writing on his Truth Social platform, said the deal would include a 15 per cent tariff on Japanese exports and claimed that Japan had agreed to invest $550 billion into the US economy. "We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump wrote, adding that &nbsp;under the deal "Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits," though he did not provide specifics.The announcement comes after months of tense negotiations between the two countries, particularly over automobiles and steel, both important Japanese exports, reports AFP.

<h2>Japan, Rice imports and market reaction</h2>Trump said that Japan has agreed to "open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things." Japan had previously resisted pressure to make concessions on rice imports, a politically sensitive issue in the nation.Following Trump’s announcement, Japan's Nikkei index rose over 1 per cent, with automotive stocks surging more than 6 per cent.

Even as Trump, in his usual 'go big, or go home' fashion, touts what he referred to as 'perhaps the largest deal ever made,' Tokyo has signalled caution. In a statement, Japanese Prime Minister Shigeru Ishiba said he would review the details before offering any official comment.

US President Donald Trump on Tuesday (Jul 22) declared that Washington had reached a "massive" new trade agreement with Japan, a deal he claimed would bring billions in investments and create "hundreds of thousands of jobs" in the United States. Even as Trump, in his usual 'go big, or go home' fashion, touts what he referred to as 'perhaps the largest deal ever made,' Tokyo has signalled caution. In a statement, Japanese Prime Minister Shigeru Ishiba said he would review the details before offering any official comment. "As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement," Ishiba told reporters in Tokyo after Trump's announcement. 'Largest Deal' between US and Japan Trump, writing on his Truth Social platform, said the deal would include a 15 per cent tariff on Japanese exports and claimed that Japan had agreed to invest $550 billion into the US economy. "We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump wrote, adding that under the deal "Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits," though he did not provide specifics. The announcement comes after months of tense negotiations between the two countries, particularly over automobiles and steel, both important Japanese exports, reports AFP.

Even as Trump, in his usual 'go big, or go home' fashion, touts what he referred to as 'perhaps the largest deal ever made,' Tokyo has signalled caution. In a statement, Japanese Prime Minister Shigeru Ishiba said he would review the details before offering any official comment.

Trump claims US will get 90% of profits in 'largest deal' with Japan—Tokyo still reading the fine print, says need to review terms

Japan is scrambling to head off steep new US tariffs, as last-ditch negotiations with President Donald Trump’s administration show few signs of progress. With a crucial tariff pause set to expire on July 9, Tokyo is warning of significant risks to its vital manufacturing sector if a deal cannot be reached.&nbsp;According to Reuters, Japan’s chief tariff negotiator Ryosei Akazawa held “in-depth exchanges” over the phone with US Commerce Secretary Howard Lutnick on Thursday and Saturday. The Japanese government said in a statement that it would “continue actively coordinating with the US side” in an effort to prevent the higher tariffs from taking effect.&nbsp;Prime Minister Shigeru Ishiba, speaking on Wednesday, vowed to defend Japan’s national interests, noting that Japan is the largest foreign investor in the United States. As per Reuters, Ishiba’s comments reflect Tokyo’s growing frustration with what it sees as aggressive US demands and limited willingness to compromise.<h2>Trump threatens even higher tariffs</h2>President Trump has repeatedly threatened to increase tariffs far beyond the current 24 per cent level announced in April. This week, Trump criticised Japan for what he described as its reluctance to buy US-grown rice, accusing Tokyo of maintaining unfair barriers. Yet Reuters reports that Japan has in fact imported historically high volumes of US rice in recent months, as domestic prices have surged.&nbsp;Despite those purchases, Trump has indicated he may bypass further negotiations altogether. According to Reuters, he suggested he could simply send Japan a letter outlining a new tariff rate of 30 or even 35 per cent. The White House declined to comment directly on the possibility of higher duties, referring only to Trump’s public statements. Reuters also noted that Trump said on Friday he had signed letters to 12 countries informing them of new tariff intentions, though he did not identify which nations would receive them.<h2>Japan’s auto industry on the line</h2>Japan’s top priority in these negotiations remains securing an exemption for its automotive sector. As per Reuters, Japanese automakers are already facing a 10 per cent tariff on most exports to the US. On top of that, Washington has threatened an industry-specific tariff of 25 per cent on imported vehicles, a move that would hit Japan’s manufacturers particularly hard.&nbsp;After nearly three months of negotiations without a breakthrough, Tokyo’s options are narrowing. Japan is one of America’s most important trading partners, and its carmakers are major employers in the US. Yet Reuters reports that Trump has so far shown little inclination to compromise, casting doubt on whether Japan can avoid higher tariffs. Prime Minister Ishiba said his government remained determined to find a solution, but acknowledged the difficulties, stressing the need to protect key national interests even as talks drag on.<h2>An uncertain outlook</h2>With the July 9 deadline fast approaching, the risk of escalation is real. As Reuters reports, Trump has questioned whether a deal is even possible and has publicly floated higher tariff rates. For Japan, failure to secure an agreement could have damaging economic consequences, especially for its automakers and exporters.&nbsp;Beyond the economic impact, the standoff also threatens to strain the broader US-Japan alliance. As the two sides edge closer to a potential trade war, Japan’s negotiators are under intense pressure to avert a damaging outcome while managing an increasingly unpredictable White House.&nbsp;(With inputs from the agencies)

With a crucial July 9 deadline nearing, Japan scrambles to secure a tariff exemption from the Trump administration amid rising tensions, aggressive US demands, and fears of economic fallout.

Japan is scrambling to head off steep new US tariffs, as last-ditch negotiations with President Donald Trump’s administration show few signs of progress. With a crucial tariff pause set to expire on July 9, Tokyo is warning of significant risks to its vital manufacturing sector if a deal cannot be reached. According to Reuters, Japan’s chief tariff negotiator Ryosei Akazawa held “in-depth exchanges” over the phone with US Commerce Secretary Howard Lutnick on Thursday and Saturday. The Japanese government said in a statement that it would “continue actively coordinating with the US side” in an effort to prevent the higher tariffs from taking effect. Prime Minister Shigeru Ishiba, speaking on Wednesday, vowed to defend Japan’s national interests, noting that Japan is the largest foreign investor in the United States. As per Reuters, Ishiba’s comments reflect Tokyo’s growing frustration with what it sees as aggressive US demands and limited willingness to compromise. Trump threatens even higher tariffs President Trump has repeatedly threatened to increase tariffs far beyond the current 24 per cent level announced in April. This week, Trump criticised Japan for what he described as its reluctance to buy US-grown rice, accusing Tokyo of maintaining unfair barriers. Yet Reuters reports that Japan has in fact imported historically high volumes of US rice in recent months, as domestic prices have surged. Despite those purchases, Trump has indicated he may bypass further negotiations altogether. According to Reuters, he suggested he could simply send Japan a letter outlining a new tariff rate of 30 or even 35 per cent. The White House declined to comment directly on the possibility of higher duties, referring only to Trump’s public statements. Reuters also noted that Trump said on Friday he had signed letters to 12 countries informing them of new tariff intentions, though he did not identify which nations would receive them. Japan’s auto industry on the line Japan’s top priority in these negotiations remains securing an exemption for its automotive sector. As per Reuters, Japanese automakers are already facing a 10 per cent tariff on most exports to the US. On top of that, Washington has threatened an industry-specific tariff of 25 per cent on imported vehicles, a move that would hit Japan’s manufacturers particularly hard. After nearly three months of negotiations without a breakthrough, Tokyo’s options are narrowing. Japan is one of America’s most important trading partners, and its carmakers are major employers in the US. Yet Reuters reports that Trump has so far shown little inclination to compromise, casting doubt on whether Japan can avoid higher tariffs. Prime Minister Ishiba said his government remained determined to find a solution, but acknowledged the difficulties, stressing the need to protect key national interests even as talks drag on. An uncertain outlook With the July 9 deadline fast approaching, the risk of escalation is real. As Reuters reports, Trump has questioned whether a deal is even possible and has publicly floated higher tariff rates. For Japan, failure to secure an agreement could have damaging economic consequences, especially for its automakers and exporters. Beyond the economic impact, the standoff also threatens to strain the broader US-Japan alliance. As the two sides edge closer to a potential trade war, Japan’s negotiators are under intense pressure to avert a damaging outcome while managing an increasingly unpredictable White House. (With inputs from the agencies)

Japan faces mounting pressure as last-ditch efforts to avert steep US tariffs risk failure, threatening its key auto sector and trade ties.

Japan confirms ‘in-depth’ talks with US as tariff deadline looms

Japan&rsquo;s economy contracted unexpectedly in the first quarter of 2025, signalling a fragile recovery. The contraction, which marks the first since 2024, has been attributed to a drop in exports, flat consumer spending, and the looming impact of trade tensions with the US, including tariffs imposed by President Donald Trump.
According to preliminary data from the Cabinet Office, Japan&rsquo;s real GDP contracted an annualised 0.7 per cent in the January-March period, far worse than the median forecast of a 0.3 per cent drop.
This decline follows a robust 2.4 per cent expansion in the previous quarter, highlighting the vulnerability of the export-heavy economy. With private consumption, which accounts for more than half of the economy, stagnating and net exports contributing negatively to growth, Japan&rsquo;s economic outlook appears increasingly uncertain.
<h2>US tariffs deepen challenges</h2>
The contraction in Japan&rsquo;s economy comes as the country faces mounting challenges from trade tensions with the US, particularly following Trump&rsquo;s sweeping tariff measures. In March, the US imposed a 25 per cent duty on steel and aluminium imports, followed by tariffs on automobiles and other Japanese goods in April. These measures are expected to weigh heavily on Japan&rsquo;s export-driven industries, notably the automotive sector, which is a cornerstone of its economic growth.
Japanese automakers, such as Toyota and Honda, have already signalled that the tariffs are affecting their profitability. Honda recently revised its profit forecast for the fiscal year, and Toyota followed suit. The tariffs could cost Japan&rsquo;s automotive sector an estimated &yen;2 trillion ($13.7 billion) in operating profits for the current financial year, prompting concerns about the broader impact on Japan&rsquo;s economy.
Despite these challenges, Japan has signalled that it is prepared to hold out for a better trade deal with the United States. Prime Minister Shigeru Ishiba has made it a priority to negotiate with the US over tariff exemptions. However, the outcome of these talks remains uncertain as the negotiators have yet to reach a breakthrough, and the pressure is mounting on Japan&rsquo;s leadership to secure a favourable deal.
As Japan&rsquo;s economy faces significant headwinds, much of the focus is now on the negotiations with the US over trade tariffs. Japan&rsquo;s economy minister, Ryosei Akazawa, and finance minister, Katsunobu Kato, have already held several rounds of talks with US officials, but significant hurdles remain.
Japan&rsquo;s starting position is the elimination of all new tariffs, including those on automotive and steel imports, which have been particularly damaging to its largest industries. The question now is whether Japan can win exemptions from these tariffs through continued negotiations or whether it will be forced to accept a deal that could further hamper its economic recovery.
While the US and China have recently negotiated a temporary truce, Japan has not yet made substantial progress in its talks with Washington, leaving the country&rsquo;s economic future hanging in the balance.
<h2>India&rsquo;s rising economic power</h2>
While Japan grapples with economic contraction, India is on a different trajectory. With a large and youthful population, a growing manufacturing base, and increasing digital transformation, India has almost closed the economic gap with Japan.
This shift will soon propel India into the position of the world&rsquo;s fourth-largest economy, as Japan&rsquo;s economic challenges deepen. Experts suggest that, with Japan&rsquo;s economy slowing and India continuing its growth trajectory, India may soon surpass Japan in terms of total GDP.
Although the United Nations has reduced India&rsquo;s 2025 growth forecast to 6.3 per cent, experts still predict that India&rsquo;s economic ascent will continue, potentially shifting the global rankings in the coming years.
<h2>The future of Japan&rsquo;s economy</h2>
Japan&rsquo;s economic vulnerability, coupled with its slowing domestic demand, has raised questions about its ability to withstand the impacts of external trade pressures, particularly in light of India&rsquo;s growing economic influence. While Japan&rsquo;s policymakers face pressure to stimulate growth through fiscal measures or interest rate cuts, they are constrained by political considerations and weak demand.
For Japan, the road ahead is fraught with uncertainty. The ongoing trade challenges, combined with stagnant domestic consumption and global trade disruptions, threaten to undermine the nation&rsquo;s ability to maintain its position as a global economic power. Meanwhile, India&rsquo;s continued rise suggests that Japan may soon face new competition for its spot in the top tier of the world&rsquo;s largest economies.
As Japan grapples with these challenges, the global economic landscape is set to undergo a transformation. The balance of power may soon shift, with countries like India emerging as stronger players in the global economy, while Japan&rsquo;s future hangs in the balance amid ongoing trade tensions and internal stagnation.

Business & Economy: Japan’s real GDP contracted an annualised 0.7 per cent in the January-March period highlighting the vulnerability of the export-heavy economy.

Japan’s economy contracted unexpectedly in the first quarter of 2025, signalling a fragile recovery. The contraction, which marks the first since 2024, has been attributed to a drop in exports, flat consumer spending, and the looming impact of trade tensions with the US, including tariffs imposed by President Donald Trump. According to preliminary data from the Cabinet Office, Japan’s real GDP contracted an annualised 0.7 per cent in the January-March period, far worse than the median forecast of a 0.3 per cent drop. This decline follows a robust 2.4 per cent expansion in the previous quarter, highlighting the vulnerability of the export-heavy economy. With private consumption, which accounts for more than half of the economy, stagnating and net exports contributing negatively to growth, Japan’s economic outlook appears increasingly uncertain. US tariffs deepen challenges The contraction in Japan’s economy comes as the country faces mounting challenges from trade tensions with the US, particularly following Trump’s sweeping tariff measures. In March, the US imposed a 25 per cent duty on steel and aluminium imports, followed by tariffs on automobiles and other Japanese goods in April. These measures are expected to weigh heavily on Japan’s export-driven industries, notably the automotive sector, which is a cornerstone of its economic growth. Japanese automakers, such as Toyota and Honda, have already signalled that the tariffs are affecting their profitability. Honda recently revised its profit forecast for the fiscal year, and Toyota followed suit. The tariffs could cost Japan’s automotive sector an estimated ¥2 trillion ($13.7 billion) in operating profits for the current financial year, prompting concerns about the broader impact on Japan’s economy. Despite these challenges, Japan has signalled that it is prepared to hold out for a better trade deal with the United States. Prime Minister Shigeru Ishiba has made it a priority to negotiate with the US over tariff exemptions. However, the outcome of these talks remains uncertain as the negotiators have yet to reach a breakthrough, and the pressure is mounting on Japan’s leadership to secure a favourable deal. As Japan’s economy faces significant headwinds, much of the focus is now on the negotiations with the US over trade tariffs. Japan’s economy minister, Ryosei Akazawa, and finance minister, Katsunobu Kato, have already held several rounds of talks with US officials, but significant hurdles remain. Japan’s starting position is the elimination of all new tariffs, including those on automotive and steel imports, which have been particularly damaging to its largest industries. The question now is whether Japan can win exemptions from these tariffs through continued negotiations or whether it will be forced to accept a deal that could further hamper its economic recovery. While the US and China have recently negotiated a temporary truce, Japan has not yet made substantial progress in its talks with Washington, leaving the country’s economic future hanging in the balance. India’s rising economic power While Japan grapples with economic contraction, India is on a different trajectory. With a large and youthful population, a growing manufacturing base, and increasing digital transformation, India has almost closed the economic gap with Japan. This shift will soon propel India into the position of the world’s fourth-largest economy, as Japan’s economic challenges deepen. Experts suggest that, with Japan’s economy slowing and India continuing its growth trajectory, India may soon surpass Japan in terms of total GDP. Although the United Nations has reduced India’s 2025 growth forecast to 6.3 per cent, experts still predict that India’s economic ascent will continue, potentially shifting the global rankings in the coming years. The future of Japan’s economy Japan’s economic vulnerability, coupled with its slowing domestic demand, has raised questions about its ability to withstand the impacts of external trade pressures, particularly in light of India’s growing economic influence. While Japan’s policymakers face pressure to stimulate growth through fiscal measures or interest rate cuts, they are constrained by political considerations and weak demand. For Japan, the road ahead is fraught with uncertainty. The ongoing trade challenges, combined with stagnant domestic consumption and global trade disruptions, threaten to undermine the nation’s ability to maintain its position as a global economic power. Meanwhile, India’s continued rise suggests that Japan may soon face new competition for its spot in the top tier of the world’s largest economies. As Japan grapples with these challenges, the global economic landscape is set to undergo a transformation. The balance of power may soon shift, with countries like India emerging as stronger players in the global economy, while Japan’s future hangs in the balance amid ongoing trade tensions and internal stagnation.

Japan’s economy contracts amid US tariff strains, India poised to overtake

US President Donald Trump and Japanese Prime Minister Shinzo Abe said on Wednesday they had agreed to intensify trade consultations between the two longtime allies, with an aim to expand investment and trade between their countries.

"President Trump and I agreed to start talks for free, fair and reciprocal trade deals," Abe said at a joint news conference with Trump.

Trump reaffirmed his desire at the news conference to address trade imbalances with Japan, saying he preferred one-on-one talks to negotiate a bilateral deal aimed at trimming the US trade deficit.

While the leaders said they had agreed to have top advisers pursue talks, Abe made clear that differences remained in each country's approach.

"On the US side, they are interested in a bilateral deal," Abe told reporters. "Our country's position is that TPP is the best for both of our countries," he added, referring to the Trans-Pacific Partnership trade deal.

The TPP was sought by former Democratic President Barack Obama. Trump abandoned it during his first weeks in office, saying it was not a good deal for the United States.

"I don't want to go back into TPP, but if they offered us a deal that I can't refuse on behalf of the United States, I would do it," Trump said.

"But I like bilateral better. I think it's better for our country. I think it's better for our workers, and I much would prefer a bilateral deal, a deal directly with Japan," he added.

Trump last month imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports that have been in place for about three weeks.

He said the tariffs had brought many countries to the negotiating able and that he may take them off of steel and aluminium imported from Japan if the two countries can come to a trade agreement.

The Trump administration granted temporary tariff exemptions to several other US allies but not Japan. Just after the tariffs took effect, South Korea agreed to a permanent steel exemption in exchange for a new quota that effectively cuts its steel shipments by 30 per cent.

Abe said that Japanese steel and aluminium did not "exert any negative influence" on US security.

"It's our position that the quality of Japanese products is high and many of these products are difficult to be replaced with. They are greatly contributing to US industries and employment," Abe said.

While the leaders said they had agreed to have top advisers pursue talks, Abe made clear that differences remained in each country's approach

US President Donald Trump and Japanese Prime Minister Shinzo Abe said on Wednesday they had agreed to intensify trade consultations between the two longtime allies, with an aim to expand investment and trade between their countries. "President Trump and I agreed to start talks for free, fair and reciprocal trade deals," Abe said at a joint news conference with Trump. Trump reaffirmed his desire at the news conference to address trade imbalances with Japan, saying he preferred one-on-one talks to negotiate a bilateral deal aimed at trimming the US trade deficit. While the leaders said they had agreed to have top advisers pursue talks, Abe made clear that differences remained in each country's approach. "On the US side, they are interested in a bilateral deal," Abe told reporters. "Our country's position is that TPP is the best for both of our countries," he added, referring to the Trans-Pacific Partnership trade deal. The TPP was sought by former Democratic President Barack Obama. Trump abandoned it during his first weeks in office, saying it was not a good deal for the United States. "I don't want to go back into TPP, but if they offered us a deal that I can't refuse on behalf of the United States, I would do it," Trump said. "But I like bilateral better. I think it's better for our country. I think it's better for our workers, and I much would prefer a bilateral deal, a deal directly with Japan," he added. Trump last month imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports that have been in place for about three weeks. He said the tariffs had brought many countries to the negotiating able and that he may take them off of steel and aluminium imported from Japan if the two countries can come to a trade agreement. The Trump administration granted temporary tariff exemptions to several other US allies but not Japan. Just after the tariffs took effect, South Korea agreed to a permanent steel exemption in exchange for a new quota that effectively cuts its steel shipments by 30 per cent. Abe said that Japanese steel and aluminium did not "exert any negative influence" on US security. "It's our position that the quality of Japanese products is high and many of these products are difficult to be replaced with. They are greatly contributing to US industries and employment," Abe said.

Differences remain as Trump, Japan's Abe agree to intensify trade talks