Tokyo urges U.S. to honor 2025 trade deal terms as a proposed 15% blanket tariff threatens to disrupt Japanese exports. Economy Minister Ryosei Akazawa directly appealed to U.S. Commerce Secretary Howard Lutnick during Friday’s talks, stressing that any deviation from agreed terms would spike costs for Japan’s automotive sector. The 15% levy—stacked atop existing duties—risks undoing a key provision of last year’s agreement that slashed Japanese car tariffs from 27.5% to 15%, secured alongside a $550 billion U.S. investment pledge.

Legal and economic stakes escalate after the U.S. Supreme Court struck down Trump-era tariffs in February, prompting Washington to impose a new 10% baseline levy. Japan’s deal includes safeguards against such retroactive changes, but the administration’s move to escalate tariffs to 15% has triggered alarm. Akazawa warned that violating the agreement would harm both economies, noting Japan’s critical role in supplying rare earth minerals for U.S. clean energy projects.

Broader cooperation continues despite tensions. Discussions also covered Japan’s second-phase investment plans, including a potential nuclear power project with Westinghouse Electric and offshore drilling initiatives. The $36 billion first-phase package focused on natural gas, while the new phase aims to bolster energy security. These talks precede Prime Minister Sanae Takaichi’s March 19 visit to Washington, where trade terms and nuclear partnerships will likely dominate.

Market volatility persists as the Nikkei 225 index closed at 35,620.84, up 0.62% but trailing its weekly decline. Investors remain wary of tariff uncertainty, though U.S.-Japan economic ties remain robust. The Commerce Department’s social media update acknowledged the dialogue but omitted specifics on Japan’s tariff request, signaling diplomatic caution ahead of high-level summits.