U.S., Japan sign limited trade deal, leaving autos for future talks

Obinwannem News U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal on Wednesday that cuts tariffs on U.S. farm goods, Japanese machine tools and other products while further staving off the threat of higher U.S. car duties.

Trump said the first-phase deal would open up Japanese markets to some $7 billion worth of U.S. products annually, cutting Japanese tariffs on American beef, pork wheat and cheese.

Although the agreement does not cover trade in autos, Abe said he had received reassurance from Trump that the United States would not impose previously threatened “Section 232” national security tariffs on Japanese car imports.

“Between President Trump and I, myself, this has been firmly confirmed that no further, additional tariffs will imposed,” Abe told a news conference. “And with the entry into force of our trade agreements, I believe both of our economies will be able to further grow and develop.”

U.S. Trade Representative Robert Lighthizer said after a signing ceremony between the two leaders on the sidelines of the United Nations General Assembly that the two countries would tackle cars in a later round of negotiations expected to start next April.

Autos are the biggest source of the $67 billion U.S. trade deal, and Trump has frequently complained that U.S. automakers do not enjoy equal access to Japan’s market.

Lighthizer said it was not the U.S. intention to impose additional car tariffs, which would be based on the results of a Commerce Department study that has found auto imports to threaten national security.

Japanese Foreign Minister Toshimitsu Motegi, who had negotiated the pact with Lighthizer, said that as long as the agreement was faithfully implemented, the tariffs would not be applied.

A Japanese government statement also said further talks would seek to eliminate the existing 2.5% U.S. tariff on Japanese cars and would not result in the imposition of U.S. import quotas on Japanese autos.

Lighthizer, during a previous stint at the office of the U.S. Trade Representative (USTR) in the 1980s, helped negotiate voluntary export restraints on Japanese autos, which led to increased U.S.

production by Japanese automakers. But Japan still exports about 1.7 million cars a year to the United States, making up about 10% of U.S. vehicle sales. Japan’s Prime Minister Shinzo Abe shakes hands with U.S. President Donald Trump during a signing ceremony on the sidelines of the 74th session of the United Nations General Assembly (UNGA) in New York City, New York, U.S., September 25, 2019. REUTERS/Jonathan Ernst

Wednesday’s deal was met with cautious praise from farm groups and lawmakers, who said they looked forward to a more complete deal.

U.S. Representative Jackie Walorski, an Indiana Republican, said she was “encouraged the deal will mean fewer barriers to digital trade and more certainty that costly auto tariffs will not threaten American jobs or raise prices for consumers.”

The U.S.-Japan talks, launched a year ago, hit a snag earlier this week as Japan had sought last-minute assurances that Trump would not impose the Section 232 tariffs.

The USTR characterized the agreement signed by Trump and Abe as “early achievements” from their negotiations on market access for agriculture, industrial goods and digital trade.

Read more here>>>https://www.reuters.com

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