President Donald Trump escalated trade tensions with Japan on Tuesday, threatening to impose tariffs of “30% or 35%” if no agreement is reached before the July 9 deadline.

What Happened: The threat represents a significant increase from Japan’s current 10% tariff rate on most exports, implemented during Trump’s April 2 “Liberation Day” when he imposed duties on trading partners worldwide, reported the BBC.

Japanese automakers, including Toyota Motor Corp. (NYSE:TM), currently face 25% tariffs on vehicles and parts, while steel and aluminum imports carry 50% duties.

“We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it,” Trump said, casting doubt on reaching an agreement before the 90-day negotiation window expires.

Toyota has already announced $200 vehicle price increases starting in July, directly attributing the hikes to tariff pressures. The company exports 1.67 million vehicles to the U.S. annually while manufacturing locally.

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Prime Minister Shigeru Ishiba‘s administration faces pressure as parliamentary elections approach. Deputy Chief Cabinet Secretary Kazuhiko Aoki declined to comment on Trump’s latest threats Wednesday, stating Japan doesn’t respond to every U.S. official remark.

Trump originally pledged to sign 90 trade agreements during the tariff pause, but has completed only the UK deal.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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