The hoped-for certainty turned into emptiness for Japanese Prime Minister Shigeru Ishiba when his bilateral meeting with US President Donald Trump at the G7 Summit in Calgary failed to produce any trade agreement.
The negotiations, which had previously given Japan some glimmer of hope, after weeks of discussions including several phone calls and an official visit to Washington, finally reached a deadlock when the two sides still had not reached an agreement.
This failure has raised great concerns about the prospects of the Japanese economy, which now needs to prepare for a possible recession following a new wave of tariffs from the US.
According to a report by the Daiwa Research Institute, the 10% tariff rate is expected to increase to 24% starting in early July, which has the potential to reduce Japan's GDP forecast by 2.2% by 2029.
Ishiba stressed that Japan will continue to defend its national interests and will not rush into signing agreements that could be detrimental.
But pressure is mounting, especially on Japan's auto industry, which employs more than 5.6 million people and accounts for about 10% of the country's GDP.
Tokyo has offered various concessions such as increased soybean imports from the US and cooperation in the shipbuilding industry, but has failed to convince Washington.
Even more burdensome, the failure of the negotiations has also damaged Ishiba's position as Japan's main opposition party is now considering a vote of no confidence in him.
Japan, previously seen as a frontrunner to reach an initial agreement, is now lagging behind the UK and China, which have already reached an agreement with the US.
