By on July 17, 2019

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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28 Comments on “Japan Eyeballs Minor Trade Deal With U.S. Slated for September...”


  • avatar
    highdesertcat

    Any progress that is better for the US of A’s side of the trade in the future, is better for the US of A than it had been for the decades past.

    • 0 avatar
      James Charles

      Then why is the US running huge trade deficits?

      They’ve increased since Trumps arrival.

      You see HDC, Trump is no business man, he’s more akin to a used car salesman or realestate agent.

      The US is similar to an enterprise arrangement. The US has a customer and supplier side. So, you need SRM and CRM management skills to run the US. Trump and the team he’s selected don’t have the required skills to manage a complex and complicated organisational structure that needs to focus on supplier and customer relationships.

      I fear for the US.

      • 0 avatar
        ToddAtlasF1

        800 billion dollar trade deficits were the norm prior to the economic collapse. When the economy cratered, the trade deficit fell to 500 billion in 2009 and it has been increasing back up to the norm ever since. The economy has been growing quickly under Trump, so we’re back to people having the money to buy lots of imported consumer goods again.

        • 0 avatar
          highdesertcat

          “The economy has been growing quickly under Trump, so we’re back to people having the money to buy lots of imported consumer goods again.”

          Amen.

          People with money will always keep on keeping on.

          It’s the people who live pay check to pay check that benefit from the Trump administration’s economic and other national policies.

          Millions of American citizens, many like me, are enjoying their best financial prospects of their lives.

          Way to go, President Trump!

          • 0 avatar
            James Charles

            HDC,
            You are smarter than that! ,,… maybe not.

            The US economy is like turning around an oil tanker compared to a ski boat.

            Trump had little to do with the US economy. His impact will take several years, plus some maybe.

            It’s not like he comes in and you win the lottery.

            I thought you had some economic acumen.

          • 0 avatar
            ToddAtlasF1

            I love watching someone with an eighty IQ trying to harness neuro-linguiistic programming. It’s like watching a kitten with a computer. Sorry Big Al, but if HDC possessed the weak character to make him susceptible to childish peer pressure tactics, he’d already believe what you do.

        • 0 avatar
          James Charles

          Todd,
          Why did the US economy crater? China? Mexico? Or was it self inflicted by the US in the way it packaged bad debt and sold it?

          When you make a decision look at your rationale, facts, value, means and end.

          You might find your views reek of subjectivity, with lttle substance.

          • 0 avatar
            JoeBrick

            @JimmyCharles-Trump’s BIGGEST ACCOMPLISHMENT is that he is not Barak Obama or Hillary Clinton. Under Obama, the U.S. had absolutely zero victories for eight years, and a lot of defeats. Contrast this with a few very significant victories Like getting out of the Paris climate scam which would have cost us Billions, ditto the Iran no-signature nuclear “deal”. But mostly some trade deals. Correct, the total impact will not be felt for years. But it will last for years. A BIG IMPROVEMENT. Trump understands one thing- business. His utopia is every country trading with everyone else and everyone making money. He also understands that war ruins business for everybody. That is because he is not a politician, and he does not talk or act like one.

  • avatar
    James Charles

    The US had a perfect opportunity to create more wealth for itself with the Trans Pacific Trade Pact, but Trump threw it away.

    The US needs to make concessions as well, as the rest of the world owes the US nothing. The US must learn to compete. US agriculture falls short in many instances with other nations. Maybe if the US just started producing what customers want across all industries it might sell more.

    US vehicles are a classic example of not producing what the export customer wants. Agriculture another. The US like Australia can produced agri products, but as commodities. Once processing and value adding is involved the US loses out. So, who is at greater fault. Again like vehicles apply the standards to meet customer demand.

    The American business model needs some fine tuning to make America more competitive. You just can’t say you will buy our “stuff”.

    Another thing. There are already in place trade deals with the Japanese (TTP). The TTP is of more value to the Japanese quantatively and qualatatively. The concessions, if any given to Trump will amount to little, and make it appear Trump had a win, like NAFTA. When in fact the US are getting crumbs.

    • 0 avatar
      Hummer

      Any country that agrees to the TPTP is selling their country to China, it’s a first class ticket to turn a 1st world nation into a bottom feeding 3rd world nation. Have fun with that Big Al, maybe I should go see Australia before they’re cast into the dark ages.

      • 0 avatar
        James Charles

        I would use your name, but, you’d better get mine correct.
        Is this comment for me? Who’s Big Al? Some of my comments get some weird responses.

        As for the Pacific Trade Pact, China was excluded. China wanted in, but was told to go away. The Pacific Trade Pact was engineered to combat China. Read up.

        Sort of blows your theory.

    • 0 avatar
      JoeBrick

      The Trans Pacific Partnership was just “More NAFTA”, and would have given away more jobs. Obama never did anything to benefit Americans and American jobs. And why would he ? His gpal was something other than the interests of American citizens, much like the democrat/socialists in the news right now.

  • avatar
    -Nate

    Oh, boy ~

    Looks like rough seas ahead .

    -Nate

  • avatar
    mikey

    “Some of Big Als comments get weird responses ?? ”

    I’m shocked !

    • 0 avatar
      highdesertcat

      Don’t be shocked. Someone with such a distinct writing style, using the same phrasing under all personae previously on ttac, is easily identified and has got to be a Chinese bot, praising China.

      Much of the time this bot is talking to itself. Others skip over the comments. Replying to any of these faux comments only affords this bot credibility where there ain’t none to be had.

      Weird responses? For lack of a better term, maybe.

      Begging to interact with anyone, is more like it.

  • avatar
    Peter Gazis

    Food for Auto parts.
    Sounds like U.S. manufacturing gets screwed again.
    How about we just have our Navy sink Japans whaling fleet. Then Japan will have to import more food.

    • 0 avatar
      highdesertcat

      ” import more food.”

      The Japanese eat a lot of ocean-derived food, like whale, dolphin, tuna, shark, tortoise, fish, squid, shrimp, kelp, seaweed and the like.

      I don’t know of any place on this planet the Japanese could import those foods from. Certainly not on the scale they are harvesting it from the sea themselves. Not many nations eat what the Japanese eat.

      • 0 avatar
        JoeBrick

        The Japanese are OVERFISHING many areas and endangering many fishing areas not just around Japan, but all around the world. Just like the Chinese are doing to sharks- catching them, cutting off their fins, and discarding the carcass. I am not a tree hugger but I do read the news.

      • 0 avatar
        Peter Gazis

        highdesertcat

        They’ll just have to eat more Habachi Steak, Teriyaki Chicken, Tofu. Ramen Noodles. Also this being an automotive sight, we usually think of rice to power cars and motorcycles, but it can be eaten as well.

        • 0 avatar
          highdesertcat

          Peter Gazis, my experience with Japanese food goes all the way back to 1967 when I went to R&R at Camp Zama and also when visiting my son in Japan while he was a Marine at Futenma during the ’90s.

          After he got out of the Corps he got a job at a Japanese bank near the Ginza and married a Japanese girl. So our trips became more frequent.

          Having been duly indoctrinated by my Japanese daughter-in-law on Japanese food, I tend to stay away from the more exotic dishes. I’m VERY selective in what seafood I eat.

          That said, noodles and rice done in a variety of different ways with different sauces can be a delight, or a gastric nightmare for the Western (read American) palate.

          And Sushi is an acquired taste once you know what goes into each roll.

          Joe Brick is right in that the Japanese are overfishing in many areas. OTOH, so are we Americans, especially in the North Atlantic and the Bering Sea/Strait.

          So the Japanese importing more food isn’t as straightforward as it might sound since it is unlikely they would buy it from the US. They cultivate their own steak because American steak is too low class.

          And the US already has a major food shortage, resorting to importing huge quantities of food from Mexico, and Canada, just to keep our shelves stocked.

          Much of the American diet doesn’t fly elsewhere.

          • 0 avatar
            Peter Gazis

            Highdesertcat

            Fine if the Japanese people don’t want to diversify their pallet, let them starve.

        • 0 avatar
          -Nate

          ” we usually think of rice to power cars and motorcycles, but it can be eaten as well.”

          It also makes good wine if you like wine .

          Last thing I knew, Japan was buying a large percentage of the annual California long grain white rice and importing it to eat .

          -Nate

    • 0 avatar
      bts

      The deal sounds like it was made only to please Trump’s base of voters who are mostly rural people with no reasoning to see why this is a bad idea.

      The US should be focusing on manufacturing advanced auto parts, not producing more food that has no value added and doesn’t further America’s technology or people.

      • 0 avatar
        Hummer

        Japan is a 1st world country with high manufacturing costs, the majority of their automotive manufacturing in country is on mid-low volume vehicles with costs that tend to be higher than competitors. Japan is a small risk to American automotive companies, coupled with the fact all the big Japanese players have pretty much brought their bread winners to America already.
        No the rural people you deride for being less than intelligent see this, the rural people also see the real enemy here is countries that produce these products for wages dramatically lower than demanded in a 1st world country. And then sell them at the same price while putting not using our labor to produce them. The enemy is China, Mexico, Thailand, etc, not a first world country that sits on a more level playing field.

        Additionally the Food and Farming industry in the US accounts for 1 trillion dollars every year, so much for “no value added”. We have expansive amounts of free land to produce food that many countries don’t have access to.

        And trying to export vehicles to Japan has shown to be a fools errand, you have to fight where your battle has a chance of success.

      • 0 avatar
        cdotson

        Only a deranged anti-Trumper would be so dumb as to claim that FOOD does nothing to further America’s people.

        Try living without it for as long as it takes to bank the average automobile’s MSRP on the average American’s annual salary.

  • avatar
    NN

    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.

    • 0 avatar
      Art Vandelay

      “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.

  • avatar

    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.


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