KANANASKIS, CANADA — June 15, 2025 Japanese Prime Minister Shigeru Ishiba will travel to Canada on Sunday for a critical round of trade negotiations with U.S. President Donald Trump, aiming to secure relief from tariffs that have placed immense pressure on Japan’s automotive sector and threaten to destabilize his already fragile political standing.
The bilateral meeting, scheduled to take place on the sidelines of the G7 summit in Kananaskis, Alberta, marks the second in-person encounter between Ishiba and Trump. It follows a sixth round of high-level trade discussions held in Washington on Friday, led by Japan’s top tariff negotiator, Ryosei Akazawa, who met with U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick in pursuit of a breakthrough.
At the heart of the talks is Ishiba’s bid to persuade Trump to roll back the 25% tariff imposed on Japanese automobiles, as well as a proposed 24% reciprocal tariff that remains on hold but looms large. Striking the right balance will be key: the prime minister must avoid concessions that could cost him politically ahead of a crucial upper house election next month.
Political Stakes for Ishiba
Analysts warn that Ishiba returning home without a deal may be politically safer than agreeing to terms viewed unfavorably by the Japanese public. His Liberal Democratic Party, already weakened by a lower house election loss last November, now governs with the support of coalition partners. A second electoral setback could collapse his administration and potentially reset U.S.-Japan trade relations under new leadership.
“If the talks go badly, it could paradoxically benefit Ishiba, portraying him as standing firm against American pressure,” said Michael Cucek, a political science professor at Temple University in Tokyo.
Financial analyst Joseph Kraft of Rorschach Advisory echoed that sentiment. “The most important thing is that Ishiba does not cave to a bad auto deal,” he said. “There may be a compromise, even a haphazard one. Trump needs a win, and his interest in broader G7 matters appears limited.”
Economic Impact Looms
Although a failure to reach agreement in Canada may not trigger an immediate economic downturn, economists caution that continued tariff pressure could weigh heavily on Japan’s growth trajectory.
Mizuho Research & Technologies has estimated that sustained U.S. tariffs could reduce Japan’s GDP by up to 0.9%.
“The April export data was telling,” said Asuka Tatebayashi, a senior analyst at Mizuho Bank. “While the number of cars exported to the U.S. increased, the overall dollar value dropped nearly 5%. This suggests that manufacturers are either pushing low-cost models or absorbing the tariff costs themselves — neither of which is sustainable in the long term.”
Strategic Calculations Ahead
With both domestic political stability and global economic implications hanging in the balance, Prime Minister Ishiba’s mission in Canada is as much about diplomacy as it is about survival.
As the G7 summit convenes, all eyes will be on the outcome of the Ishiba-Trump meeting — a pivotal moment that could define the trajectory of Japan-U.S. trade relations for years to come.
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