Newly manufactured cars await export at a port in Yokohama. Photo: REUTERS file
politics

U.S.-Japan trade deal hits snag as Tokyo seeks assurances on car tariffs

20 Comments
By David Lawder and David Shepardson

A U.S.-Japan trade deal hit a last-minute snag as Japanese officials sought assurances that the Trump administration will not impose national security tariffs on Japanese-built cars and auto parts, people familiar with the talks said on Monday.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe are aiming to sign a trade deal at a meeting this week during the United Nations General Assembly in New York that provides increased access to Japan for U.S. agricultural goods and bilateral cuts in industrial goods tariffs.

But the limited trade deal is not expected to include changes to tariffs and trade rules governing autos, the biggest source of the $67.6 billion U.S. trade deficit with Japan.

Trump has refrained thus far from following through on his threat to impose tariffs of up to 25% on Japanese and European car and parts imports, citing ongoing trade negotiations with these partners.

The New York Times earlier reported that Japan was demanding a "sunset clause" that would cancel any trade benefits for the United States if Trump imposes the auto tariffs on Japanese vehicles.

Japanese Foreign Ministry spokesman Masato Ohtaka said that Japan still hoped to sign the U.S. trade deal by the end of September and that there was still time to work out remaining issues.

Ohtaka told reporters in a briefing that U.S. Trade Representative Robert Lighthizer and Japanese foreign minister would discuss these issues at a meeting in New York later on Monday evening.

"Frankly speaking, we still have some time and all my colleagues in the government are making their best efforts to actually meet this target," Ohtaka said.

Japanese Chief Cabinet Secretary Yoshihide Suga, speaking in Tokyo, told a news conference: "With the U.N. General Assembly meeting in mind, we are accelerating the remaining work, including the wording of a trade agreement."

Executives at two automakers briefed on the matter said Japan has expressed concerns about signing a deal without assurances that Trump will refrain from imposing tariffs on Japanese automotive exports as he benefits from Japanese agricultural concessions.

These people, speaking on condition of anonymity, confirmed that the issue could delay the signing of a U.S.-Japan trade deal until subsequent weeks.

Details of the U.S.-Japan trade deal have not been disclosed, but people familiar with it say that it will provide U.S. farmers who have been battered by the U.S. trade war with China some relief through increased access to Japan, including for American beef and pork.

But some people say it will provide less than the access they would have received had the United States remained in the Trans-Pacific Partnership trade deal, which Trump pulled the United States out of on his third day in office in January 2017.

The deal also includes a modernization of digital trade rules, which is expected to reinforce the U.S. model of internet development, prohibiting cross-border taxation of e-commerce and data localization requirements.

Trump and Abe a year ago at the U.N. General Assembly agreed to discuss an arrangement that protects Japanese automakers from further tariffs while negotiations are under way.

The trade deal would not require congressional approval, using a trade law provision that allows the U.S. president to make executive agreements to mutually reduce tariffs with a foreign trading partner.

© (c) Copyright Thomson Reuters 2019.

©2019 GPlusMedia Inc.

20 Comments
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Why wouldn't you insist on a sunset clause in any agreement with the US, I wouldn't trust Trump and the US on any agreement that didn't have safeguards for Japan regarding future actions by Trump

6 ( +7 / -1 )

I would not trust even with an agreement which he would break at his convenience. Remember nothing will force the Japanese consumer to buy American brand junk.

-7 ( +2 / -9 )

So all the hype about an agreement was just hype?

Thats Suprising! If you live in a bubble buried 1km underground wearing ear muffs and blind.

Yeah an agreement to talk further was never an actual agreement.

4 ( +4 / -0 )

I would not trust even with an agreement which he would break at his convenience. Remember nothing will force the Japanese consumer to buy American brand junk.

Matter of opinion, but a common response from a Japanese person who thinks that EVERYTHING made in Japan is superior to everywhere else in the world, even when it's not.

Even funnier is that there are products which you buy daily from your grocery store that are made with that "junk" made in America, rather ironic!

10 ( +10 / -0 )

YuriOtani's attitude is proof that a trade deal with Japan is meaningless given consumer prejudice toward anything not made in Japan. Just tax the cars and give it to the farmers and move on to a deal with China.

7 ( +7 / -0 )

 that Japan was demanding a "sunset clause" that would cancel any trade benefits for the United States if Trump imposes the auto tariffs on Japanese vehicles.

and rightly so, If Trump can remove America from other FTA as the result of sunset clauses then its perfectly fine for Japan to insist on the same. having a cloud of blackmail hanging over you all with the promise of Trumps word as reassurance is about as comforting as contracting Ebola. At least with Ebola you have the assurance that death is highly likely

0 ( +3 / -3 )

I would not trust even with an agreement which he would break at his convenience. Remember nothing will force the Japanese consumer to buy American brand junk.

Geez Yuri. Not everything we make is junk you know...

3 ( +4 / -1 )

If they insist then this has most definitely failed.

0 ( +0 / -0 )

The main task of Trump is to raise the level of production in the United States. Trump's unemployment rate is record low. Therefore, he is only interested in what is beneficial for the Americans. Not for others. Those who think that now will be the same as 10-20 years ago are mistaken.

-1 ( +0 / -1 )

Remember quality counts more than quantity.

1 ( +1 / -0 )

Well I’m glad that the Japanese stood up to Trump on this one. I mean i’m not one of those people to make a knee-jerk opinion on him one way or another, but yet I was still very happy to see at the Japanese just said no to these auto tariffs, without a sunset clause at least.

Because that’s one of the best products from Japan, it’s very high-quality stuff, and yet Trump wants to tariff them 25%? That doesn’t make any sense, especially considering how strong of an ally Japan is to the US. So this whole “national security” argument, is hollow at best.

0 ( +0 / -0 )

Not all things made in Japan are best. I do buy lots of American canned goods. I just do not wish to be forced to buy an American product. Oh I also prefer Jim Beam whiskey over anything Japanese which causes me to get the worse hangovers.

0 ( +1 / -1 )

If the USA trashes the paper, American companies will automatically lose access to Japanese market!

0 ( +0 / -0 )

Tokyo TTSep. 24  07:12 pm JST

YuriOtani's attitude is proof that a trade deal with Japan is meaningless given consumer prejudice toward anything not made in Japan. Just tax the cars and give it to the farmers and move on to a deal with China.

your cars are junk, its fact.

0 ( +0 / -0 )

Seth M, it is my money and all of my American brand cars were stinkers! My Firebird went through an alternator and battery every year or so and the electrons were a mess by year 4. My Japanese made Forester has had no problems in over 4 years of service. My Subaru's keep getting better!

-1 ( +0 / -1 )

"national security" = US car makers can't compete.

1 ( +1 / -0 )

A negotiation involving the master negotiator Donny hit a snag?! Say it ain't so!

0 ( +0 / -0 )

your cars are junk, its fact.

Someone has zero understanding that Japanese cars are of a far higher quality than American cars.

1 ( +1 / -0 )

Seth M, it is my money and all of my American brand cars were stinkers! My Firebird went through an alternator and battery every year or so and the electrons were a mess by year 4. My Japanese made Forester has had no problems in over 4 years of service. My Subaru's keep getting better!

Hmm...So, you finally stop with the over generalized comment and get specific. This is your opinion, and you are entitled to state it,

However next time keep in mind that not EVERYTHING in America is junk, and not everything in Japan is world class either. There is plenty of JUNK in Japan, you just dont want to accept it that's all.

0 ( +0 / -0 )

Trumpets’ reaction: Wait, they don’t actually expect him to follow through with what he said, do they?

0 ( +0 / -0 )

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