Japan's Kato Cites Trade Imbalances as Root of Global Economic Instability

🇯🇵 Japan’s Kato Blames Trade Imbalances for Unsustainable Global Economic Conditions

Tokyo / Washington, May 22, 2025 – Japan’s Finance Minister Shunichi Kato has warned that persistent trade imbalances are contributing to unsustainable economic conditions in certain countries, calling for more balanced and fair international trade practices.

His remarks came during a bilateral meeting with U.S. Treasury Secretary Scott Bessent, where the two officials discussed a range of issues affecting the U.S.-Japan economic relationship, including global economic security, currency policy, and ongoing trade negotiations between the two nations.

Kato emphasized that "imbalances in trade flows are no longer just economic metrics but systemic risks that can contribute to broader instability." While he did not mention specific countries, the statement is widely interpreted as a response to rising global tensions over protectionist policies, currency manipulation, and persistent trade deficits in advanced economies.

Secretary Bessent, for his part, reiterated the United States' commitment to a "strong, fair, and reciprocal trade relationship" with Japan, while highlighting the importance of cooperation on global financial stability.

Both sides acknowledged the need for continued dialogue and stronger coordination to ensure that global economic growth remains resilient in the face of inflationary pressures, supply chain disruptions, and geopolitical uncertainty.

The next round of bilateral trade talks is expected to take place later this summer, where issues such as tariff alignment, digital trade, and investment regulations will be further addressed.