Japan canceled a top-level meeting of foreign and defense ministers with the US after Washington's demand to increase defense spending, the Financial Times reported Saturday.
Japanese Defense Minister Gen Nakatani and Foreign Minister Takeshi Iwaya had been scheduled to meet their US counterparts Marco Rubio and Pete Hegseth, respectively, on July 1 in Washington for the annual meeting known as the 2+2.
Japan, however, canceled the meeting after Washington asked Tokyo to increase its defense spending to 3.5% higher than an earlier request of 3%, according to the report.
Japan hosts more than 50,000 American soldiers under a bilateral defense pact. There was no official reaction to the report from Tokyo.
The move has apparently angered Japan, as the two sides were already engaged in trade talks, but no progress has been made despite several rounds of negotiations.
Japan's automobile industry faces 25% tariffs. Japan also faces a 24% "reciprocal" tariff rate starting July 9 unless it can negotiate a deal with Washington.
Prime Minister Shigeru Ishiba recently said that US tariffs are "severely impacting" Japanese firms, including automakers.
Ishiba's remarks came one day after he met US President Donald Trump on Monday in Canada on the sidelines of the G7 summit, with no result on the tariffs.
In April, Nakatani announced that Japan would increase its defense spending to 2% of gross domestic product (GDP) by 2027 and plans to spend $70 billion on defense in the current fiscal year.
Japan has adhered to a pacifist constitution since 1947 -- historically limiting its defense budget to around 1% of GDP, or roughly 5 trillion yen ($34.8 billion).
In recent years, Tokyo has steadily increased defense spending amid rising regional tensions, particularly with the expanding military influence of China and security concerns involving North Korea. The country has set a goal to reach 2% of GDP in defense expenditures by 2027.
The Japanese coast guard held joint drills with its US and Philippines counterparts on Friday, as the three nations strengthen defense cooperation amid growing concerns about China's increasing maritime activities in the region.
