President Donald Trump surprised observers by joining early-stage trade talks with Japan, escalating the proceedings into a more substantial diplomatic negotiation. The meeting lasted nearly 50 minutes and involved discussions with Japan’s chief trade negotiator, Ryosei Akazawa. Trump also engaged in broader discussions involving Treasury Secretary Scott Bessent and other key U.S. officials. Though prepared for limited discussions on trade and investment, Trump focused on several additional topics, including defense spending. He asserted the meeting marked significant progress but offered no further details. Akazawa confirmed both parties agreed to meet again during the same month, highlighting Trump’s designation of Japan as a priority in trade negotiations. The unexpected engagement caused surprise in Tokyo as they perceived this participation as a green light for the U.S. to push for greater control over ongoing talks with various partners. 75 nations have sought to engage in tariff negotiations since early April, when Trump imposed comprehensive tariffs on Japan. While the meeting focused on trade and investment, issues like defense spending also emerged. Trump called on Japan to elevate its defense spending to $150 billion or 2% of its GDP (a level significantly higher than planned), prompting concerns about potential demands for increased economic contribution from the U.S. This is in addition to his push for Japan to contribute more to military spending, which was a key point of contention during the meeting. The Japanese government seeks to re-engage in trade negotiations and believes investment in the U.S., particularly through large-scale initiatives like an Alaskan gas project, can be a beneficial solution to alleviate tensions. The two countries are also navigating the complex challenges of auto tariffs – Japan is heavily reliant on exports to the U.S., and a 25% tariff remains in place despite temporary suspension. They’re seeking solutions to resolve these issues through continued trade negotiations. Trump’s aggressive stance on trade, including his claim regarding a 700% rice tariff imposed by Japan, further complicates matters. The U.S.-Japan trade relationship has been under strain for some time, and the meeting’s outcome will undoubtedly shape future negotiations between the two countries. Financial markets reacted to Trump’s engagement with positive responses; the dollar rose against the yen, while Japanese equities saw a surge.