Tokyo/Washington, August 28, 2025 – Japan has abruptly canceled its high-profile trade mission to the United States just a day before Prime Minister Narendra Modi’s scheduled visit to Tokyo, raising uncertainty over a landmark $550 billion investment package that was expected to ease tariff tensions between the two nations.
Japanese trade negotiator Ryosei Akajawa was slated to travel to Washington on Thursday to announce the final structure of the package, including profit-sharing arrangements and financial commitments. The deal was also linked to tariff relaxations, with the US agreeing to reduce duties on certain Japanese imports from 25% to 15%.
However, Japanese government spokesperson Yoshimasa Hayashi confirmed the cancellation, citing “unresolved issues in negotiations” as the primary reason.
Clash Over Profit Sharing
Tensions escalated after US President Donald Trump declared that “America will keep 90% of the profit” from the Japanese investment, calling it “our money for investment, as we want.” Tokyo strongly opposed this stance, insisting that any deal must reflect “mutual profit and partnership.”
Impact on Trade Relations
The stalled talks now put the $550 billion investment plan at risk, a move initially designed to reduce Washington’s tariff burden while boosting Japanese business opportunities in the US.
Japanese officials stressed they would not sign any agreement until Washington amends its stance on additional tariffs and reduces duties on auto parts, one of Japan’s largest export sectors.
Strategic Timing Before Modi’s Visit
The timing of the cancellation is significant as it comes just before PM Narendra Modi’s official visit to Japan, where economic partnerships and Indo-Pacific trade cooperation are high on the agenda. Analysts believe Tokyo’s decision could also affect broader US-Japan-India economic dialogue amid rising global trade tensions.
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