TOKYO, May 31, 2025 (BSS/AFP) - Japan and the United States have made progress in their latest tariff talks, agreeing to hold another round of negotiations ahead of next month's G7 summit, Tokyo said Saturday.

Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline levy placed on most nations plus steeper levies on cars, steel and aluminium.

US President Donald Trump slapped an additional 24 percent "reciprocal" levy on Japan, but this was later paused along with those on other countries until early July.

As Tokyo tries to get all levies lifted, its foreign ministry said "discussions toward reaching an agreement have progressed" in Washington.

"Japan and the United States have gained a sufficient understanding of each other's positions," a ministry statement said.

In discussions with US Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, Japan's envoy Ryosei Akazawa "once again strongly urged a reconsideration of the series of tariff measures by the United States," Japan's foreign ministry said.

The two sides agreed to hold another round of talks before a G7 summit in mid-June, it said.

After the meeting, Akazawa told Japanese reporters in Washington he demanded the US tariff measures be "reviewed immediately" and that if the talks "will move in that direction, then we may agree, but if not, it is difficult to reach an agreement".

Bessent highlighted to Akazawa "the importance of addressing tariffs and non-tariff measures, increasing investment, and working together to address economic security and other issues of mutual concern," the Treasury Department said in a statement.

Bessent also "reaffirmed the strong bilateral relationship", it said.

Trump's 25-percent auto tariffs are particularly painful for Tokyo, with around eight percent of all Japanese jobs tied to the sector.

The world's fourth-largest economy contracted 0.2 percent in the first quarter of 2025, adding to pressure on unpopular Prime Minister Shigeru Ishiba ahead of upper house elections expected in July.