Crypto News: Supply Lines: Japan gears up for talks

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Donald Trump the businessman came of age as a protectionist back in the 1980s, when Japan was the biggest threat to domestic manufacturers. Four decades later, Trump the president is showing Japan some courtesy in his trade wars now that China is the top competitor.

Asia's No. 2 economy looks set to get priority in tariff talks, moving to the front of a long line of countries seeking to roll back so-called reciprocal US border taxes, which are scheduled to kick in on Wednesday. (Click here to bookmark our Tariff Tracker.)

Trump's nostalgia for American corporate titans who persevered through the Japan shock was apparent during his so-called Liberation Day ceremony last week, when he mentioned Lee Iacocca. The late former chairman of Chrysler wrote an autobiography in 1984 with a chapter focusing on "The Japanese Challenge" and another whose title sounds a lot like Trump's current-day political slogan: "Making America Great Again."

For a administration trying to fix US trade imbalances and reshore jobs, Japan today looks more like an ally than antagonist. Treasury Secretary Scott Bessent, who along with Trade Representative Jamieson Greer will lead the American side of the negotiations, said: "I would expect that Japan is going to get priority" among trading partners for coming forward very quickly.

The push to hold bilateral trade talks comes as Japanese Prime Minister Shigeru Ishiba convened a full-cabinet meeting on Tuesday morning to discuss the tariffs. Later, his administration selected Economic Revitalization Minister Ryosei Akazawa to lead Japan's delegation in the talks.

Japan was among countries that didn't directly threaten to retaliate against the US's barrage of higher import taxes, holding out hope instead for negotiations. China went the retaliation route, and now its relationship with the Trump administration seems to be worsening.

In response, Trump vowed to add a 50% tariff starting Wednesday on top of what he's already announced if Beijing didn't withdraw its 34% retaliation, spelling out that "all talks with China concerning their requested meetings with us will be terminated!"

Related Reading:

—Brendan Murray in London

Bloomberg's tariff tracker follows all the twists and turns of global trade wars. Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Charted Territory

Twin shocks | Today's Bloomberg Big Take explores a world economy facing two shocks — from China and Trump's trade wars. Investors everywhere are trying to reprice risk in an age of uncertainty inflamed by dueling US and Chinese visions for the future. On the Big Take podcast, unpacking the seismic effect of Trump's tariffs announcement is having on markets. Bloomberg Opinion's John Authers joins host David Gura to contextualize the market moves — and explain what's likely to happen next.

Today's Must Reads

Bloomberg Economics forecasts that Trump's tariffs will reduce US GDP by almost 3% and boost inflation by 1.5% over two to three years, with a significant impact on Europe and China's exports to the US.
The Trump administration's threat of massive new tariffs has brought a short-term benefit: customers rushing to retail stores to buy iPhones.
US small-business optimism fell last month by the most since June 2022 as concerns intensified about tariff policies. The Chicago Fed president said there's a lot of anxiety among business leaders that tariffs could spark widespread supply disruptions and renew inflationary pressures.
A top South Korean trade official said the government is reviewing multiple packages to present to the Trump administration as it seeks to reduce a trade surplus with the US in a bid to negotiate a lower tariff rate.
Switzerland's outsized gold exports to the US shouldn't be included when analyzing the trade relationship between both economies, according to a paper from the Swiss National Bank.
Australia's consumer confidence tumbled in April to a six-month low. Meanwhile, New Zealand said its recovery from recession has been made more difficult by Trump's sweeping tariffs as they are likely to damp global demand for its goods.

On the Bloomberg Terminal

Container shipping rates across key global trade routes are a key reference point to watch to gauge how tariff-led inflation may be playing out in the real economy, particularly as central banks confront rising stagflation risks.
The tariff hike on Switzerland might be lower than the 31 percentage points that Trump announced last week, but the economic pain could still be substantial.
For Bloomberg Economics trade analysis: BECO MODELS TRADE
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
See DSET CHOKE for a dataset to monitor shipping chokepoints.
For freight dashboards, see BI RAIL, BI TRCK and BI SHIP and BI 3PLS
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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