Japan’s Tariff Tangle with Trump and Rice

Rising Tensions Over Rice Imports and Political Fallout

Donald Trump’s recent comments about Japan’s “spoiled” trade practices have intensified the challenges faced by Prime Minister Shigeru Ishiba as he navigates a critical period ahead of upcoming elections. The situation is particularly delicate for Ishiba, who has been in office for less than a year and is under pressure to maintain his leadership amid growing political instability.

The U.S. president has sent letters to over 20 countries, including Japan, warning of potential “reciprocal” tariffs starting in August if no trade agreements are reached with Washington. For Japan, this includes a 25% tariff on goods, which is separate from existing charges on cars, steel, and aluminum. Trump’s goal is to encourage Japanese companies to increase manufacturing in the U.S. and to boost imports of American products such as oil, gas, cars, and rice, in an effort to reduce the $70 billion trade deficit.

“I have great respect for Japan, they won’t take our RICE, and yet they have a massive rice shortage,” Trump stated on Truth Social. However, rice is not a major component of the bilateral trade relationship between the two nations. According to BMI Fitch Solutions, rice accounts for only 0.37% of U.S. exports to Japan, and even doubling that would have a minimal impact on overall trade figures.

Despite this, the political implications of the issue are significant for Japan. The country has a deep cultural connection to rice, which has historically played a central role in its society. Samurai were once paid in rice, and it remains a symbol of national identity. Importing more rice could be seen as a national humiliation, especially given that nearly all of Japan’s rice is currently domestically produced.

For many Japanese consumers, foreign rice is perceived as inferior. Long-grain varieties from the U.S., for example, are often criticized for lacking the stickiness and flavor of locally grown short-grain rice. This perception was reinforced by memories of the 1993 cold summer, when Japan had to import large quantities of rice from Thailand due to poor harvests.

“American rice tastes awful. It lacks stickiness,” said Sueo Matsumoto, a 69-year-old resident of Tokyo. “If they want to export to Japan, they must work at it. They must think about consumer preference.”

Domestic Politics and Economic Pressures

Ishiba’s government faces mounting pressure on multiple fronts. His ruling coalition suffered a major setback in the lower house elections in October, and the upcoming upper house elections on July 20 could further weaken his position. A loss in these elections might force him to step down, despite being in power for just 10 months.

The political landscape is complicated by powerful domestic lobbies, particularly those representing rice farmers. Any move to increase rice imports could provoke strong opposition from these groups. Chief Cabinet Secretary Yoshimasa Hayashi recently emphasized that the government has no intention of sacrificing agriculture in future negotiations.

“Ishiba is walking a narrow plank, wary of provoking powerful domestic lobbies while juggling an approval rating that would make aggressive trade moves politically perilous,” said Stephen Innes of SPI Asset Management.

Economic pressures are also adding to the strain. Rice prices have nearly doubled in the past year due to a combination of factors, including a hot summer in 2023, panic buying following warnings of an imminent “megaquake” in 2024, and alleged hoarding by some traders. Additionally, the surge in rice-hungry tourists has contributed to rising demand.

To address the crisis, Tokyo has begun tapping into emergency stockpiles and has increased rice imports, led by shipments from California. However, these imports remain small compared to domestic production.

“All these problems with rice prices show the LDP’s agriculture policy has failed,” said retiree Yasunari Wakasa, 77. The situation highlights the broader challenges facing the government as it tries to balance economic interests with deep-seated cultural and political concerns.

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