WASHINGTON (Kyodo) — U.S. President Donald Trump’s most expansive tariffs to date have already taken the world on a rollercoaster ride, with Japan no exception, yet there could be adjustments with key trading partners down the road, according to a former top aide.
Robert O’Brien, who served as Trump’s national security adviser from 2019 to 2021 during his first administration, predicts the president will open negotiations at some point, particularly with close U.S. allies, to reduce the risk of escalating tensions that would harm America’s interests.
“I think Japan will be at the top of the list for negotiations,” O’Brien said, noting that Washington recognizes more than ever the significance of its alliance with Tokyo, in part because of China’s rise and the tense situation in and around the Taiwan Strait, as evidenced by the Chinese military’s recent live-fire exercises.
On Wednesday, Trump unveiled sweeping new tariffs with a baseline of 10 percent for all imports and what he called “kind reciprocal” duties on goods from countries that the White House claims are the worst offenders in trade relations with the United States.
Japan is among around 60 countries targeted with higher punitive levies, despite being the No. 1 investor in the United States.
As with many other countries, the United States has had a trade deficit for decades with Japan, now facing a 24 percent tariff rate aside from autos, which were saddled with an additional levy of 25 percent that went into effect Thursday.
“We can’t have a trade war with Japan. That would be devastating for both countries,” O’Brien said in an interview with Kyodo News at a Washington hotel, hours before Trump announced tariffs on virtually all U.S. imports at a “Make America Wealthy Again” event on what he called “Liberation Day.”
O’Brien, who is serving on the President’s Intelligence Advisory Board during Trump’s second term, said the winner of a trade war between the United States and Japan or other allies would be China.
He believes the Trump administration knows its relationship with Japan is critical and that it cannot afford friction over tariffs to spread to other realms, including defense and people-to-people exchanges.
“The U.S. is always going to be open to negotiating with Japan. So I think the opportunity for compromise with Japan is going to be very high,” he said. “I’m highly optimistic.”
Although it is too early to tell when that process might begin, the White House has said Trump could lower the tariffs if trading partners take “significant steps” to remedy trade imbalances and cooperate with the United States on its economic and national security concerns.
A day after his latest tariff drive, which set off a wave of selling in global stock markets, Trump sounded a positive note, saying, “It’s going very well.”
“The markets are going to boom, the stock is going to boom, the country is going to boom, and the rest of the world wants to see is there any way they can make a deal?” he told reporters at the White House.
As for Japan, O’Brien said it is one of a few countries in a good position to reach a deal with Trump because the two allies signed a trade agreement during his first term.
The agreement, which Trump is proud of, focused on expanding U.S. agricultural access to Japan. Unlike many other countries, O’Brien expects potential U.S.-Japan negotiations to be less sectoral, given that the accord has already laid out a framework for the discussion of multiple issues together.
“I think within that framework you can bring in autos, you can bring in digital, you can bring in steel,” he said.
While characterizing Trump as a “Japanophile,” he said the one area that could become a major irritant is Japan’s digital platform regulations.
Among other developments, Japan’s antitrust watchdog announced last month that Google LLC and Apple Inc., as well as its Japanese subsidiary iTunes K.K., will be subject to the country’s new law aimed at preventing tech giants from dominating smartphone services.
O’Brien criticized the law for targeting the two American companies and said it could open up business opportunities for Chinese companies, warning of increased malware, phishing and intellectual property theft.
The 58-year-old, who also leads a consulting firm, expressed disappointment that Japan had followed the European Union in regulating the power of big tech companies.
Considering that large American tech companies are the engine of U.S. economic growth, he said, “I’m convinced” Trump will take retaliatory measures if there is any attack or anything that is viewed as an attack on them.