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Trump claims progress in Japan trade talks amid market volatility
President Donald Trump has declared "significant progress" in trade negotiations with Japan, stepping in unexpectedly during a session between U.S. and Japanese officials in Washington, DC. Despite ongoing uncertainty fueled by his administration’s aggressive tariff policies, Trump emphasized a positive tone after joining the talks alongside Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Japan’s Economic Revitalization Minister Ryosei Akazawa.
Following the meeting, Akazawa noted that Trump is eager to finalize a trade agreement before the expiration of his 90-day suspension on "reciprocal" tariffs. Japan is also pushing for a swift resolution.
Japanese Prime Minister Shigeru Ishiba acknowledged the complexities of the negotiations but said early discussions had laid a solid foundation for moving forward.
Japan, one of the United States’ closest security partners and its fourth-largest trade ally, has been impacted by a 10 percent base tariff, as well as additional 25 percent tariffs on cars, steel, and aluminum major Japanese exports. The country also faces a potential 24 percent "reciprocal" tariff under Trump’s "liberation day" measures, most of which are currently on hold until July 9.
Martin Schulz, chief policy economist at Fujitsu in Tokyo, expressed concern over the talks, noting Japan's deep integration in the U.S. economy. He remained cautiously hopeful, citing Japan’s status as the largest foreign investor in the U.S. and its desire to increase investment. Schulz suggested that if both economies maintain growth, increased imports from the U.S. could follow.
Meanwhile, U.S.-Japan trade talks coincided with another dip in Wall Street, driven by market anxiety over Trump’s ongoing tariff strategy. The S&P 500 dropped by 2.24 percent and the Nasdaq Composite by 3.07 percent.
U.S. Federal Reserve Chair Jerome Powell warned of potential economic trouble due to the tariffs, including slower growth, rising joblessness, and inflation. Speaking at the Economic Club of Chicago, Powell highlighted the possibility of a conflict between the Fed’s dual goals: maximum employment and price stability.
Since Trump took office, U.S. markets have seen repeated volatility, driven by alternating tariff threats and trade negotiations. Businesses and investors remain cautious, watching for any indication that Trump may ease his tariff stance in return for trade concessions.
So far, over 75 countries have reportedly engaged the U.S. to start trade discussions. Despite recent market setbacks, with the S&P 500 and Nasdaq down 10 and 15 percent respectively since the year began, Asian markets opened Thursday with modest gains, including Japan’s Nikkei 225, South Korea’s KOSPI, and Hong Kong’s Hang Seng Index, each up by over 0.5 percent.
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