Trump secures China tariff rollback, but allies resist deeper trade deals amid auto standoff

Trump secures China tariff rollback, but allies resist deeper trade deals amid auto standoff

After swiftly sealing a headline-grabbing trade truce with China, the Trump administration is struggling to win similar breakthroughs with longtime allies — especially over one of the thorniest issues in global trade: automobiles.

President Trump’s sweeping April 2 tariff order imposed steep “reciprocal” levies on nearly all US imports, sparking a flurry of talks with 18 strategic trade partners. While the U.K. secured a quick but limited exemption, other allies — including Japan, South Korea, and the European Union — have hit roadblocks, particularly over Washington’s insistence on maintaining a 25% tariff on imported cars.

Japan, EU and South Korea seek tariff relief
Tokyo, Brussels, and Seoul have all signalled frustration over the auto levies, which disproportionately affect their economies. Japan’s economy shrank in the first quarter, and carmakers like Toyota and Honda directly blamed the tariffs in recent earnings warnings. Ryosei Akazawa, Japan’s top trade negotiator, called the levies “deeply regrettable” and demanded their removal alongside steel and baseline tariffs.

South Korea’s trade minister met US counterparts last week on Jeju Island, and Seoul is lobbying for full exemptions, noting that its auto-parts industry supports 330,000 jobs. The EU, meanwhile, is aiming for a more favourable deal than the one struck by the UK, which won a lower auto tariff — but only on the first 100,000 vehicles per year.

Trump's allies feel burned by past deals
Despite prior goodwill, US allies are wary of Trump’s unpredictability. Japan already signed a bilateral trade deal in 2019 that lowered some agricultural and industrial tariffs, but Washington has now brushed aside that agreement as nonbinding. A similar pattern has emerged with the US-Mexico-Canada deal.

“Even if we reach a new agreement, it’s important to reaffirm that the US will observe the rules this time,” said Yoshihiko Noda, leader of Japan’s opposition Constitutional Democratic Party.

Diplomatic tightrope for US allies
While Japan has avoided publicly criticising Trump, analysts say Tokyo remains cautious not to “let Trump lose face,” especially given its reliance on the US for both market access and defence. “Japan is maybe the easiest one to negotiate with,” said former trade official Yorizumi Watanabe. “But we don’t want to give away too much.”

Potential sweeteners under discussion include Japan increasing US agricultural imports — possibly including rice this time — and buying more American-made vehicles. Japan’s shipbuilding expertise could also be leveraged to support the US Navy, aligning with Trump’s industrial agenda.

EU seeks broader deal than UK compromise
European negotiators are holding out for a more ambitious outcome than the U.K.’s limited tariff cap and warn against settling for symbolic wins. “I don’t think that’s the level of ambition Europe would be happy with,” said Polish deputy economy minister Michał Baranowski.

EU member states are especially wary of agreeing to terms that force them to dilute ties with China or accept volatile policy shifts in Washington. Still, diplomats acknowledge that with the China deal now out of the way, pressure is rising on Trump’s team to close talks with allies.

Path forward: economic diplomacy with conditions
Trade experts say any new deals with Asia will likely require US concessions on car tariffs, paired with pledges of economic and regulatory alignment from allies. But demands to weaken currency interventions or limit Chinese engagement could complicate matters.

Treasury Secretary Scott Bessent sounded optimistic Tuesday, saying, “We’ve had very productive discussions with Japan,” and noted broader progress across Asia.

For now, however, America’s closest allies remain cautious — demanding more predictability and fewer one-sided demands from a White House that keeps rewriting the rules.