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Prime Minister Ishiba is currently engaged in a delicate balancing act, managing critical international tariff negotiations while confronting important domestic economic challenges. Analysts suggest that a leadership change within the Liberal Democratic Party (LDP) is improbable at this pivotal moment, especially with ongoing talks on tariffs that heavily impact key industries like automakers.
Urgency in Tariff talks
The urgency of the tariff situation was underscored when Ishiba took a break from campaigning to request that Washington’s chief tariff negotiator and Treasury Secretary Scott Bessent continue active tariff discussions. Bessent, visiting Japan for the World Expo in Osaka, later indicated that a deal with Tokyo remained a possibility.
Domestic Economic Headwinds
Domestically, inflation has emerged as a critical issue for Ishiba, mirroring challenges faced by incumbents in other nations.The price of rice, which has doubled since the previous year, has become a potent symbol of voter discontent.
In response to these economic pressures, opposition parties have pledged tax cuts and increased welfare spending to ease the burden on citizens. Conversely, the LDP, mindful of a volatile government bond market, has been advocating for fiscal restraint.
