The United States and Japan are working on a trade deal revolving around agriculture and automobiles. As much as you’re probably dying to hear about the farming aspects, we’re going to focus a bit more on the latter. Boiled down, the arrangement is reported to deliver preferential treatment for U.S. farmers hoping to expand into the Japanese market while lessing duties on Japanese auto parts.
President Donald Trump has noted in the past that he’s displeased with any country holding a trade surplus over America’s head and Japan has one. Last year, it amounted to $67.6 billion in goods — most of it relating directly to automobiles. This initially encouraged the president to threaten tariffs on Japanese imports. However, Japan’s close ties to the United States bought it some time and any legitimate danger has been postponed to encourage trade discussions.
Trump and Japanese Prime Minister Shinzo Abe were reportedly in heavy talks at Osaka’s G20 summit in June, with accounts from both sides being favorable. The Donald even went so far as to praise Japanese automakers for their increased investments into the U.S. “I appreciate the fact that you’re sending many automobile companies into Michigan, and Ohio, and Pennsylvania, and North Carolina,” he said during his time Abe.
However, no details on the presumed productive talks emerged until Tuesday — when Politico reported some kind of deal was being arranged for September. Reuters has since said that three industry sources have confirmed that the arrangement was farming/auto related. Most framed the situation as a micro-agreement, adding that nothing had yet been finalized and all were hoping for a broader trade deal in the future.
The deal would not require congressional approval since the U.S. president can eliminate or reduce tariffs on products that have a duty of less than 5 [percent] duty, and most auto parts tariffs are roughly 3-6 [percent].
Asked about the possibility of such a deal, a Japanese government official declined to comment but said working level discussions on trade were under way.
The official said no significant progress would come until after July 21 elections for Japan’s upper house of parliament.
“We have a mutual understanding that we should find common ground so we can find a final settlement,” the official told Reuters.
[Image: Sakarin Sawasdinaka/Shutterstock]
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