Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump pose with a joint statement the two leaders made during a bilateral meeting on the sidelines of the 74th session of the United Nations General Assembly in New York City on Wednesday. Photo: REUTERS/Jonathan Ernst
politics

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

41 Comments
By Jeff Mason and David Lawder

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.

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.

The deal could provide some limited relief for U.S. farmers, who have been battered by China's retaliatory tariffs against U.S. soybeans, pork and other products in the 15-month-long trade war between Washington and Beijing.

Under the agreement, Japan would open new markets to about$7 billion in American agricultural products, Trump said."Japanese tariffs will now be significantly lower or eliminated entirely for U.S. beef, pork, wheat, cheese, corn, wine and so much more."

Trump later praised China's recent agricultural purchases as"goodwill" measures and said a deal with Beijing could come sooner than people think.

Trump also said signing ceremony with Abe that the deal's first phase would cover $40 billion worth of digital trade between the world's largest and third-largest economies.

The USTR said about 90 percent of U.S. food and agricultural products will receive duty-free or reduced-tariff access to Japan, but wheat will still be subject to a quota limiting the volume of U.S. imports.

However, many of the products gaining new access will still face tariffs that phase out over several years, including wine, ethanol, cheeses, processed pork, poultry, frozen potatoes, oranges, cherries and egg products.

Motegi told reporters that the tariff cuts on U.S. farm products are "within the range" of tariff cuts granted to countries in the Trans-Pacific Partnership trade deal, which Trump quit in 2017.

Japan will see reduced or eliminated tariffs on a small amount of agricultural goods, including cut flowers and soy sauce, and a wide range of industrial goods, including steam power turbines, machine tools, bicycles and musical instruments.

The digital trade agreement largely follows the U.S. model of internet development, prohibiting taxes on cross-border digital downloads and rules requiring so-called data localization - the storing of data on devices physically present within a country's borders, the USTR said.

The deal also limits the ability of the governments to demand source code from digital services providers for security or safety purposes, which the United States says China widely practices.

Abe said the digital trade agreement would establish high-level rules in the sector.

"The agreement is important for Japan and the United States" in terms of their leading the world in making rules for digital commerce, he added.

© Thomson Reuters 2019.

©2019 GPlusMedia Inc.

41 Comments
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So, very little substance out of Shin-chan and Donny. What a shocker. Wake me when there is real news like these two muppets actually getting things accomplished.

8 ( +11 / -3 )

So completed trade deal not so complete then...

6 ( +8 / -2 )

Abe is a smart deal maker. He leave the most difficult negotiation to the next PM.

-12 ( +1 / -13 )

Left automobiles on the side because Trump would have reneged somewhere down the line!

4 ( +5 / -1 )

What will Abe san do with $7 billion worth of US corn?

The only option left for Japan is to turn US corn into ethanol and blend into gasoline, since Japan can't eat $7 billion worth of corn per year.

-2 ( +2 / -4 )

Abe's signature looks like a math equation.

2 ( +4 / -2 )

Abe is a smart deal maker. He leave the most difficult negotiation to the next PM.

The next PM that will be chosen from members of the diet who were elected by the people. You know, elections, the things that occur on democratic societies not run by authoritarians.

5 ( +6 / -1 )

Abe's signature looks like a math equation.

From this distance, it looks like Hangul!

I hope Botchan realizes that having the man-child as his master means his ultimate boss is Putin!

1 ( +4 / -3 )

It is the same "deal" as TPP.... Trump ended up getting Zero more than any other country that signed 2 years ago. Japan Won this Trade War.

5 ( +9 / -4 )

Nothing gained, almost nothing achieved.

And just wait, maybe deDonnie will cancel this deal sooner than later.

I mean, that's what he is so good at, right!?

5 ( +6 / -1 )

You have to hand it Japanese Prime Minister Shinzo Abe he has hoodwinked President Trump.

One has to live here. To have any comprehension of the economy, the culture and the belief in the meaning community.

I still struggle, I still always struggle, never realisticity truly understanding the culture. At least Politicly.

-1 ( +1 / -2 )

It's interesting to note that Motegi and Lighthizer's interpretion are not in synch regarding autos & parts. Abe left open for trump to use section 232 based on a verbal agreement that both of the actual negotiators are not in complete agreement. Good job abe, it seems like you still don't know what trump is capable of doing.

0 ( +0 / -0 )

Trump doesn't care about anything except looking good. Abe's job is to maintain Japan's feudal hierachy. No wonder they're both smiling....

4 ( +4 / -0 )

Fortunately half of the west isn't a barking dog of the U.S.

The European Union keep it's dignity and different ideas,about trades,Iran etc.

Sad to see Japan following everything Donnie does,and this half treaty without the automobiles is absolutely nothing.

4 ( +4 / -0 )

U.S. beef, pork wheat and cheese.

There are people wanting to eat that in japan ?!

0 ( +1 / -1 )

What will Abe san do with $7 billion worth of US corn?

There is nothing about a commitment to buy $7 worth of corn, much less $7 billion. Seven billion is what Trump claims the USA will sell in agricultural products altogether from the deal. That includes beef, pork, wine, wheat, etc.

If the number is not an exaggeration ( a big "if"), most of it will consist of meat, wheat and maybe wine.

0 ( +0 / -0 )

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

A reduction in tariffs under normal circumstances will translate to increased import and reduction in prices for consumers but it isn't the case here from my experience.

So nothing for me to rejoice from the agreement, it is only going to increase profits of J-inc.

I don't expect a reduction in prices and will adopt a wait-and-see attitude.

1 ( +1 / -0 )

What is a limited trade deal, is it free or are the hand brakes on?

Cars - Biggest source of the $67 billion U.S. trade deficit with Japan .

No Seriously, U.S. President Donald Trump has been whacked on the back of the head with the gift of a gold $3,755 driver courtesy of Japanese Prime Minister Shinzo Abe, there is never something for nothing.

-1 ( +0 / -1 )

So, the tariffs are not being cut at all... they will be phased out “over several years”, meaning it could be reversed at any moment. Trump should have slammed them with the auto tariffs. Seems that’s the only thing they are scared of.

1 ( +4 / -3 )

U.S. beef, pork wheat and cheese.

Export all the diseases! Yikes

-1 ( +1 / -2 )

American beef, pork wheat and cheese

Oh come on!

They'll be trying to sell American 'chocolate' here next.

(No point reducing tariffs - you couldn't pay me to eat it)

-1 ( +1 / -2 )

Limited? Trade deal ? Didn't the Shinz give a big speech about free trade a year ago? How it is in everyone's interests to participate in a fair and unhindered exchange of products? Ironic that pork slips through this one.

1 ( +1 / -0 )

This is not a trade deal, it is the political illusion of one.

Where both U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe can go back to there electorates and hold their thumbs up.

It is a scam, The reality is the continuing trade war with between US and China. There is the rub.

1 ( +1 / -0 )

Japanese tariffs will now be significantly lower or eliminated entirely for U.S. beef, pork, wheat, cheese, corn, wine and so much more."

Given the Trump administration is doing what it can to weaken consumer protection measures to make it easier for corporations to bypass government health standards, I'd be even warier of US meat if corporations are allowed to do their own inspections. (Read Upton Sinclair's 'The Jungle' for a bit of history of America's slaughterhouses.)

A new USDA rule gives pork producers more control.https://www.vox.com/future-perfect/2019/9/18/20869186/trump-administrations-slaughterhouse-rules-usda-pigs

1 ( +1 / -0 )

Wake me when there is real news like these two muppets actually getting things accomplished.

That's a long sleep you're going to have, my friend.

So, the tariffs are not being cut at all... they will be phased out “over several years”, meaning it could be reversed at any moment. Trump should have slammed them with the auto tariffs. Seems that’s the only thing they are scared of.

agree 100%

2 ( +2 / -0 )

They way I see it, same thing as the TPP that wasn't signed except a delay. As for the autos, then the US big 3 should have done like Toyota and built a factory in Japan this way the costs of parts wouldn't have been so expensive and affordable, and built for Japan roads and environment. I just want my beef instead of the tiny overpriced US beef we get now in Japan.

3 ( +3 / -0 )

Capitulation by Abe, just to pacify Trump, this is all political circus. How can you have a trade deal that is so one sided in Trumps favor without getting a written guarantee against a possible 25% tariffs that Trump could impose in the future on Japans bloodline industry, if Abe and Japan cause Trumps ego to be upset. American agricultural imports, due you honestly think Japan inc is going to give consumers a good deal , wake up, choice is the only thing you will have, and Japanese mindset is to buy Japanese products over imported if they can, plus at a time when wages are stagnating, a 2% consumption tax rise next month, and the bank of Japan chasing a 2% inflation target. No this isn't a consumer deal , just more political circus.

-1 ( +0 / -1 )

Well, everybody seems to get what they want, and nobody is getting what they don't want, with the future left open.

I think it is sad though, that Japan initially wanted things in writing. It undermines trust which has been built on for decades.

At the end of the day, the consumer decides.

-1 ( +0 / -1 )

According to Kyodo, 'the United States will maintain its current 2.5 percent tariff on U.S.-bound Japanese vehicles and auto parts'.

'But Japan is viewed as having made more concessions than the United States amid the U.S. threat of higher tariffs on Japanese auto imports, a critical issue for the export-reliant economy. Under the latest deal, the United States will keep its current tariffs on automobiles and auto parts from Japan.'

'The country will eliminate tariffs on $1.3 billion of U.S. agriculture products, including almonds, blueberries, sweet corn and sorghum, it said. It will also eliminate duties on commodities like ethanol, cheese and whey, frozen poultry and oranges'.

Tariffs on these products will be eliminated:

Almonds

Blueberries

Cranberries

Walnuts

Sweet corn

Broccoli

Prunes

Tariffs on sweet cherries and oranges will be lowered in phases.

Japan will provide a “staged tariff elimination” on imports of U.S. cheeses, processed pork, poultry, beef offal, ethanol, wine, frozen potatoes, oranges, fresh cherries, egg products and tomato paste, the fact sheet said

It sounds like a good deal for the U.S and Japanese consumers.

0 ( +2 / -2 )

Before this new "Deal" Japan imposed a 38.5% tariff on U.S. Beef, versus TPP members 26.6%. Japan will now lower tariffs on U.S. Beef to be in line with the TPP schedule. That is it.... no major leg up on the competition for the USA. Trump basically put the USA behind those that agreed to the deal two years ago.

0 ( +1 / -1 )

Other countries will likely be ropeable over this. Going beyond what it told its TPP negotiation partners was the absolute bottom line, is a sure fire way of undermining that previous agreement. The only question is who’ll break ranks first to spill the beans about the Japan that can say ‘no’ except when it’s dealing with its great benefactor America. Even if they don’t go public, the damage has already been done and there’s likely to be a serious trust deficit.

1 ( +1 / -0 )

@Eppee

U.S. beef, pork wheat and cheese.

There are people wanting to eat that in japan ?!

Sure. This deal is for Costco in Japan. Next time you visit your local Costco.

Have look in a few carts the Japanese are pushing around. Mind you discreetly.

Beef, cheeses, Pork, Kirkland products. The Japanese love it!

On another note:

Trump has frequently complained that U.S. automakers do not enjoy equal access to Japan's market.

Ok look. I am in the car business in Japan now two decades at the highest level. All know I support my party and the President here on JT. But, I wonder what Trump invions here, what exactly? Japanese driving around the new Dodge Demons? My competitor sell GM new Chevy Camaros, GMC, Cadillac's and what not. They have a nice niche. Do well. They sell allot here in Fukuoka. The roads are wide open here. However, I really call into question what the President is thinking here. From a dealer stand point. I can see the Focus doing well here. Espcially the RS. The ST. And there is a few for sale here in Japan. But those come from Ford Germany. Every Toyota, Nissan, in the Ford Focus and Fusion class can not compete with what Japan can produce. I wonder what he is thinking here? Tesla? Sending over more American Toyota's like the FJ? American Nissan's? If I am Japanese. Why in the world why I buy an American made Toyota out of Tennessee or Norfolk? No thanks. Land cruiser 80 please. Go ahead and keep your FJ cruiser. Mr. President. If you want to see American made cars in force on the roads over here. Then give the Japanese a product worth buying. Cause the Japanese who want to buy a Camaro or a Cadillac. Very few and far between. In Japan Jeep does well. Because its Japan FCA. Jeep (ICON).

Better get this tariff nonsense sorted out. Americans are going to buy Japanese cars no matter what. As well Korean cars and everything else economical they can get there hands on.

I challenge Ford to come up with 660 CC (or less) vehicle that can out preform what is already here and is safer and cost less than what Daihastu, Suzuki, Mazda, Honda, are already producing. Honestly it can not be done. Because that is the only way your going to see American dealership and American cars here in Japan in mass quantities. Mr. President. It's pipe dream. American Auto manufacturing can not enter this market and make a car the average Japanese family or person can afford. Fact!

0 ( +0 / -0 )

@rgcivilian1

As for the autos, then the US big 3 should have done like Toyota and built a factory in Japan this way the costs of parts wouldn't have been so expensive and affordable, and built for Japan roads and environment. I just want my beef instead of the tiny overpriced US beef we get now in Japan.

Exactly. The thing is. America car manufactures can not afford the price of land here. And the construction costs. Unless they can short stack a production line for kei cars in some of these old closed up factories like in Yamaguchi or Kurme here in Kyushu. (and there are lots abandoned and empty old decrepit factories) The building would need to be fixed I guess. Modern power platforms would need to be brought in. I have seen the Suzuki Every production line.(very short and compact) I have seen the Ford F-150 production line. (forget it, can not work in Japan). Like I said. I wonder what Trumps thinking when he says do not enjoy equal access to Japan's market. Harley Davidson sells allot of bikes here in Japan. But no factory here. Whats he thinking?

I really want to know.

0 ( +0 / -0 )

Next time you visit your local Costco. 

Have look in a few carts the Japanese are pushing around. Mind you discreetly. 

Beef, cheeses, Pork, Kirkland products.

I stock up at Costco on blocks of mature Parmesan and Pecorino - Italian, not American.

Chocolate - Swiss or Belgian, not American.

Mixed Nuts - a variety of origins

Kirkland butter used to be from New Zealand, it seems recently to have been replaced with Japanese-grown butter?

Invalid CSRF

0 ( +0 / -0 )

cutting Japanese tariffs on American beef, pork wheat and cheese.

Does this mean I won't have to pay like 300 yen for like 75g of parmesan cheese any more?

-1 ( +0 / -1 )

American Auto manufacturing can not enter this market and make a car the average Japanese family or person can afford. Fact!

I don't know what you are talking about, even European cars are very expensive here and only a few Japanese as a status symbol can afford them.

Some made in Japan electronics are more expensive here in Japan than abroad.

0 ( +0 / -0 )

Exactly. The thing is. America car manufactures can not afford the price of land here. And the construction costs. Unless they can short stack a production line for kei cars in some of these old closed up factories like in Yamaguchi or Kurme here in Kyushu.

Of course, it doesn't make economic sense investing hundreds of millions of dollars building assembly line in a market that the number of new cars sold a year is 5 million compared to U.S. 18million and China 24million due to the declining birthrate and rapid ageing the car sales will continue to fall.

Even in the retail business, apart from costco, carrefour set up shop sold off and left. Walmart has not bothered to use seiyu to invest and expand here in Japan, maybe because of regulations and tariffs.

0 ( +0 / -0 )

@cleo,

Obviously you have never worked at Costco.

You do realize that everything in your cart was not sent to your local Costco directly right?

That it was sent to Kirkland holdings then shipped to Japan.

Thank American business and ingenuity!

Don't choke on a nut!

CSRF. Bhahaha!!

0 ( +0 / -0 )

@ drlucifer

Of course, it doesn't make economic sense investing hundreds of millions of dollars building assembly line in a market that the number of new cars sold a year is 5 million compared to U.S. 18million and China 24million due to the declining birthrate and rapid ageing the car sales will continue to fall.

I apologize in advance, But I disagree with your assessment. There are factories that are completely abandoned here in my location in Tosu Saga. There is a 50,000 square foot warehouse that used to make Hitachi tractors and heavy equipment behind my building. It belongs to Hitachi and it (the building) and the land are for sale. If you have about 140 million dollars. Way overpriced!

It could easily handle auto production. We also have a nuclear power grid here. The warehouse factory has 2 foot deep concrete slab that needs some repair and capping. But totally workable. It is a large facility and with a little bit of vision and investment. Anyone could go in and set up on the cheap, And we have labor force here in Fukuoka/Saga. As well many foreign nationals that could come and work in such a place already living here.

Companies like Denka/Toshiba/Toto are already hiring foreign nationals at record pace here. Why not let in a foreign corporation and set shop. EV car maker is just one idea. I know it could work if Japan would loosen up a bit. With Bollinger Motors buying materials from Japan. As well Lucid as well Faraday Future. It's only a matter of time before one of these EV manufacturing companies launch an assembly plant here.

Saga/Fukuoka could be great HUB for these EV car companies to make cars and send them all over the world. Or Harley Davidson with there new line of EV products coming out soon. We have space. We have the trains for containers. We have the local ferries. From Moji Port. Other ports in Japan can be reached easliy.

From Kawasaki port. Yokohama port. Kobe port. Nagoya port.

China. Taiwan. anywhere in Asia. Matter of fact anywhere in the world can be touched and reached.

So it is totally worth investing in.

The problem here is the land cost, the red tape, the stringent government regulations, and the politics and payoffs.

Maybe you think I do not know what I am talking about. That's cool.

https://www.theverge.com/2018/3/21/17148402/faraday-future-construction-hanford-factory-production-debt

Whatever happens in China, Faraday Future finally appears ready to pursue production of its expensive, but ludicrously fast EV in California. Meanwhile, the city of Hanford has been waiting. The Pirelli plant had been largely dormant for over 15 years, and Faraday Future promised north of 1,000 jobs once the factory is up and running.

Let's hope Trump and Abe can get this tariff nonsense over with so corporations and investors can start looking at Japan as an opportunity again.

the car sales will continue to fall.

Naw, it will not. It will just change and morph as EV cars take over and gas powered cars become obsolete.

Maybe not now. But 10 years from now. 20 years from now.

0 ( +0 / -0 )

Such mistakes from abe always repeat itself. What is he getting from trump ???.

0 ( +0 / -0 )

Does this mean I won't have to pay like 300 yen for like 75g of parmesan cheese any more?

Totally, like, you know, I mean, like that's way expensive for like cheese, you know?

0 ( +0 / -0 )

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