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Why US will reimburse Japan for ‘wrongly collected’ tariff

After the meeting with Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent on Thursday, Akazawa said now the US will not be adding the 15 per cent duty to existing tariffs but will instead treat it as something akin to a ceiling rate.

Japan said the US expressed regret about the 'stacking' rule, wherein the 15 per cent reciprocal tariffs were being added to the existing tariffs. (File Photo)

Japan said the US expressed regret about the 'stacking' rule, wherein the 15 per cent reciprocal tariffs were being added to the existing tariffs. (Credit: Pixabay)

The US has agreed to revise an executive order to ensure that Japan is not charged more than the 15 per cent tariff agreed between both sides last month and reimburse all mistakenly collected duties, Japanese trade envoy Ryosei Akazawa told reporters on Thursday.

Following his ninth round of engagement with Washington, Akazawa said the US expressed regret about the ‘stacking’ rule, wherein the 15 per cent reciprocal tariffs were being added to the existing tariffs.

A table attached to Trump’s July 31 executive order that addressed tariff rates for many trading partners showed a “no stacking” condition applied to the European Union, while no such clarification was given for Japan, news agency Reuters reported.

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After meeting Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent on Thursday, Akazawa said now the US will not be adding the 15 per cent duty to existing tariffs but will instead treat it as something akin to a ceiling rate.

Akazawa also said that US officials agreed to formalise the reduction in auto tariffs to 15 per cent, in line with the countries’ trade agreement.

With the auto sector employing roughly 8 per cent of the nation’s workforce, according to Bloomberg, Japanese carmakers are struggling with 27.5 per cent tariffs – a combination of a previous 2.5 per cent rate and a new 25 per cent applied by Trump.

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