In mid-2025, the U.S. and Japan announced a major trade agreement proposing a 15% tariff cap on Japanese imports in exchange for a sweeping $550billion Japanese investment into U.S. strategic industries. Among the initial outcomes was a promise to increase U.S. rice imports into Japan's tariff-free quota by 75%.

However, implementation has hit a roadblock. Japan's chief trade negotiator, Ryosei Akazawa, abruptly canceled his visit to Washington, reportedly due to disagreements over a revised U.S. executive order that includes new demands for broader tariff rollbacks and mandatory rice import expansions.

Japanese officials argue these new U.S. terms contradict the original framework of the July pact. While the White House said Japan would immediately expand rice imports, Japan's agriculture ministry clarified that the increase would remain within existing duty-free limits, ensuring no impact on domestic rice producers.

Last year, Japan imported around 346,000 metric tons of U.S. rice, part of its 770,000-ton duty-free quota, which accounts for roughly 11% of domestic demand. A 75% hike could raise U.S. imports to nearly 600,000 tons, likely at the expense of other exporters such as Thailand, Australia, and China.

Beyond agriculture, Japan is also pressing for changes to U.S. tariff structures, particularly regarding autos and beef, before formalizing the pact via executive action. On the U.S. side, officials have indicated a policy update is in progress, but no official signing has occurred.

The lack of a written, binding agreement has triggered political criticism in Japan. Opposition leaders have warned that any new agricultural concessions must receive parliamentary approval, further complicating the timeline for implementation.

Until both sides resolve these tensions-particularly over rice-the July deal remains unratified and politically vulnerable. The dispute underscores how even landmark agreements can unravel under domestic pressures and unresolved sector-specific demands.