The US and Japan have signed an initial trade deal that will eliminate tariffs on a range of trade goods, particularly agricultural products, with no mention of any new US tariffs on Japanese auto imports, a potentially sensitive area because of Japan’s huge trade surplus with the US on car trade.
US President Trump described the initial deal that has been struck as a ‘very big’ and ‘tremendous’ trade deal, although he stressed the need for reciprocity in US trade deals with Japan and all countries to avoid the ‘one-way street’ that has benefited other countries at the expense of the US economy.
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However, he also acknowledged that the Japanese are ‘spending a tremendous amount of money in our country also, building automobile factories, automobile plants’.
President Trump also said about the deal signed yesterday: “Under the market access agreement that we’re announcing today, Japan will open new markets to approximately $7 billion in American agricultural products. Japanese tariffs will now be significantly lower, or eliminated entirely, for U.S. beef, pork, wheat, cheese, corn, wine, and so much more.
“We also reached a deal for robust commitments on $40 billion of digital trade between our two countries. This will greatly expand commerce across cutting-edge products and services.”
Trump also said that ‘phase two’ in the bilateral trade discussions has already begun: “Our teams will continue negotiations on remaining areas of interest to achieve a final comprehensive agreement,” he said at a press conference.
Reuters reported that the chairman of the Japan Automobile Manufacturers Association (JAMA) – Toyota chief Akio Toyoda – said after the signing that trade discussions between the US and Japan were ‘going in the direction of avoiding auto tariffs and that it was good for both countries’.
Trump’s administration earlier this year delayed a decision until November over whether to impose new levies of as high as 25% on imported vehicles over national security grounds to allow more time for talks with Japan and the European Union. Bloomberg reported that he also agreed with Japan that there would be no new tariffs while trade talks continue.
