Japan's chief trade negotiator, Ryosei Akazawa, said that the country cannot accept U.S. President Donald Trump's 25% auto tariffs as trade talks continue with the seventh round set to take place in Washington.
What Happened: "We have repeatedly explained to the U.S. that Japan's automobile industry has made an enormous contribution to the U.S. economy," Akazawa said, according to Bloomberg on Thursday.
Akazawa added that the country wants to explain this "clearly" to the Trump administration and "seek understanding," between the two countries.
Japanese automotive companies produce over 3.3 million vehicles annually in the U.S. and export about 300,000 of these vehicles to other countries, the report suggests.
"In any case, we consider the 25% automobile tariff to be unacceptable," Akazawa said. He also said that Japan ships 1.67 million vehicles to the U.S. However, Japanese automobile manufacturers invested over $60 billion in the country and created over 2.3 million local jobs.
Why It Matters: Akazawa's comments follow Trump's scheduled meeting with Japanese Prime Minister Shigeru Ishiba over the tariffs, among other issues, at the G7 summit. However, the planned meeting could not take place as Trump left the summit early due to the Israel-Iran conflict.
Tariffs have affected several manufacturers in the U.S., as most recently, Toyota Motor Corp. (NYSE:TM) announced it will be hiking vehicle prices by $200 starting in July. This comes in as Trump had earlier suggested he may hike auto tariffs in a bid to boost domestic production.
Elsewhere, Sen. Elizabeth Warren (D-Mass) warned that Trump's "dumb trade war" was standing in the way of lower costs for the country. "Chair Powell confirmed Trump’s dumb trade war is driving the Fed’s forecast of higher inflation," she said.
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