Japan, China Set for Economic Talks As US Tariff Pressure Rises

(Bloomberg) --

Japan and China are set to hold their first economic dialogue in six years on Saturday, an event aimed at reducing tensions as the Asian giants face trade pressure from the US.

China is Japan’s largest trading partner but the two nations have been at loggerheads over issues including a territorial dispute and a ban imposed by Beijing on seafood from Japan following the release of wastewater from the crippled Fukushima Dai-ichi Nuclear Power Plant.

Surveys show Japanese firms in China have become more pessimistic about doing business in China due to rising geopolitical tensions, deteriorating bilateral ties and stiff competition from Chinese firms. Still, the scale and close proximity of the Chinese market means it’s in Japan’s interest to maintain stable relations.

Beijing has also been making moves to stabilize ties with its major trading partners as it faces rising trade tariffs from Washington.

“Large Japanese companies are still making profits from China, so Japan has no choice but to continue to do business with China,” said Norihiko Ishiguro, chairman of the Japan External Trade Organization.

The wastewater issue along with the working environment for Japanese businesses in China will likely be among discussion topics during the economic dialogue, according to Japan’s foreign ministry.

“I look forward to taking this opportunity to work with China to reduce our issues and concerns step by step, while increasing areas of cooperation and collaboration,” Japan’s Foreign Minister Takeshi Iwaya said earlier this week.

The economic dialogue will take place on the same day as a meeting in Tokyo between Iwaya, China’s top diplomat Wang Yi and South Korean Foreign Minister Cho Tae-Yul.

Ahead of the meetings, Japan’s foreign ministry downplayed the impact of the US tariffs. Japan will respond if China raises the issue of US tariffs in the economic dialogue, but a coordinated response to the tariffs is not likely, a Japanese foreign ministry official said.

Trilateral discussions will be focused mainly on areas of cooperation and regional issues, especially North Korea, another ministry official said. US tariffs are not part of the agenda, although that topic may be raised, he said.

Cooperation between the three nations in recent years has focused on promoting people-to-people exchanges, green transformation and exploring how best to manage aging societies.

The first trilateral summit between Japan, China, and South Korea was held on the sidelines of an ASEAN summit in 1999. It eventually became a standalone event in 2008 and an office dedicated to fostering cooperation between the three nations was set up in Seoul three years later.

The trilateral meeting and economic dialogue take place weeks before U.S. President Donald Trump is set to unveil more tariffs on April 2.

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