As the US Trade Representative, Mickey Kantor, sat down with Yohei Kono, the Japanese Foreign Minister, and Ryutaro Hashimoto, the Trade Minister, all that was certain was that the negotiations would continue up to - and perhaps beyond - the midnight deadline the Clinton administration had set.
Whatever the outcome, Mr Kantor has announced a press conference at noon today at which he will announce any US reprisals.
In fact Japan faces a twin sanctions threat. One, involving government procurement in telecommunications and medical equipment, could start after 30 days with US curbs on Japanese companies bidding for federal contracts.
The other involves the so-called Super 301 trade law, application of which sets off a gradual process punishing Japanese manufacturers in specific sectors where US producers suffer discrimination in Japan. Here the prime candidates are plate glass and, above all, the super-sensitive car and car component industries, which alone account for half Japan's dollars 60bn annual trade surplus with the US.
Faced with the risk of currency turmoil, Washington is expected to avoid harsh reprisals. Most experts predict agreement in some areas and disagreement in others, leading to the application of relatively mild counter-measures.
But if the markets decide that 'trade war' has been declared the consequences could be severe.Reuse content