Japan Eyeballs Minor Trade Deal With U.S. Slated for September

Matt Posky
by Matt Posky
japan eyeballs minor trade deal with u s slated for september

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.

From Reuters:

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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  • NN NN on Jul 18, 2019

    The Japanese aren't going to buy F-150's. As far as cars are concerned, what American car would they buy? Probably only Tesla, and maybe some Jeeps, although the small/efficient Jeeps are not US made. I don't think Model 3 has launched in Japan yet, at least bestsellingcarsblog has no data on it. However Tesla sold 14k cars in Europe last month, which if you average $50k, is $700M in a single month of US exports. Tesla could make a dent, but no matter what Americans are likely going to continue buying way more Lexus. Most Toyota/Honda/Nissan are US assembled these days, Japanese companies tend to be great corporate citizens.

    • Art Vandelay Art Vandelay on Jul 18, 2019

      "Japanese companies tend to be great corporate citizens." TEPCO? I mean what great citizens...let's not use the ocean water to cool the melting reactors because you know, it'll ruin them and they are expensive. I wish they'd do a Chernobyl style miniseries on that focusing on that one. Good citizens my foot.

  • Voyager Voyager on Jul 19, 2019

    Trump's tariff policies will result in (even) more complacency in Detroit, that is no longer forced to be as competitive and innovative as possible, protected within its own home market. American consumers will no longer get the best, and for foreign imports they will have to pay more.

  • NJRide Now more than ever, the US needs a brand selling cheaper cars. I know the old adage that a "good used car" is the best affordable transportation, but there has to be someone willing to challenge the $45k average gas crossover or $60k electric one that has priced out many working and middle class people from the market. So I think Mitsu actually may be onto something. Call me crazy but I think if they came up with a decent sedan in the Civic space but maybe for $19-20k as opposed to $25 they might get some traction there's still some people who prefer a sedan.However, I just compared a Trailblazer on Edmunds to an Outlander Sport. Virtually same size, the Trailblazer has heated seats, keyless ignition and satellite radio and better fuel economy for almost same price as the Mitsu. Plus a fresher body and a normal dealer network. This has always been the challenge off brands have had. Mitsu probably would have to come in $2-3k less than the Chevy unless they can finance more readily to the subprime crowd.
  • MaintenanceCosts At least on the US West Coast, Waze is perfectly happy to send cut-through drivers down residential streets or to disregard peak-hour turn or travel restrictions. I hope if it's going to be standard equipment the company starts taking a more responsible approach.
  • MaintenanceCosts I'm more curious about the effect (if any) on battery lifetime than range. Drawing current faster creates more heat and if that heat is not promptly drawn away it could affect life of the cells.I agree this sort of thing can make sense as a one-time option but is consumer-hostile as a subscription.
  • Ajla "The upgrade is permanent" 🤔Journos really should be calling out the automakers like Mercedes that are attempting to make this sort of thing subscription only because it obviously doesn't need to be."with a one-time price tag of $1,195"This also shows the poor consumer "value" of Mercedes wanting $1200 per year for a 60hp jump on the EQE350.
  • Dukeisduke Will the next owner have to pay up, too, like with Tesla? What's the starting price of the Polestar 2? I saw a clean used one listed locally the other day, and it was under $50k. I wasn't sure if that was a deal or not.