TOKYO—Japan’s ruling coalition suffered a significant loss in a parliamentary election Sunday, a setback that risks derailing delicate trade negotiations with the U.S. just weeks before punishing tariffs are set to take effect.

The LDP lost its majority in the lower house when Ishiba called a snap general election last October. The LDP has not been in a minority position in both houses simultaneously since its foundation in 1955.

Japanese Prime Minister Shigeru Ishiba’s ruling coalition failed to secure a majority in the 248-seat upper house in a crucial parliamentary election, Japan’s NHK public television said Monday.