By Leika Kihara TOKYO (Reuters) -Japanese Prime Minister Shigeru Ishiba said on Tuesday that he would continue negotiations with the U.S. to seek a mutually beneficial trade deal, after President Donald Trump announced 25% tariffs on goods from Japan starting August 1.

When Japanese Premier Shigeru Ishiba first met Donald Trump in February, his plan to placate the protectionist president's long-held frustration with Tokyo on trade was a promise to invest $1 trillion in the United States.

Trump’s renewed tariff threats hit some of the closest U.S. allies. Japanese Prime Minister Shigeru Ishiba described the developments as “deeply regrettable.”

Trump has now extended the deadline for negotiations to Aug. 1 and tinkered with his threatened tariffs, leaving the global trading system pretty much where it stood three months ago — in a state of limbo as businesses delay decisions on investments, contracts and hiring because they don’t know what the rules will be.

Japanese Prime Minister Shigeru Ishiba pushed back against the idea there has been little progress in negotiations with the US on a trade deal as a deadline looms for a 24% across-the-board tariff to take force.

Japan is a major car exporter and 25% levies on auto imports into the U.S.—separate from what President Trump calls reciprocal tariffs—have been a key sticking point in trade negotiations. “The auto industry is our core industry.

Japan must diversify trade ties beyond the U.S. market to mitigate risks and focus on partnerships with countries favouring free trade, Hirofumi Yoshimura, co-representative of the opposition Japan Innovation Party,