At Least for Cars, Preliminary U.S.-Japan Trade Deal Keeps the Status Quo

Steph Willems
by Steph Willems
at least for cars preliminary u s japan trade deal keeps the status quo

There’s good news if you’re a U.S. farmer, however. A preliminary deal reached between the two countries this week would keep existing auto tariffs in place, though President Donald Trump claims there’s still the possibility of a hike.

It was the threat of import tariffs that brought Japan to the table following the U.S.’s 2017 pullout of the Trans-Pacific Partnership, and the agreement in principle announced this week keeps new tariffs off the table, though auto groups continue demanding action on an issue Lee Iacocca used to rail about: reciprocity.

Trump and Japanese Prime Minister Shinzo Abe signalled an agreement on the core principles of the deal during the G7 summit in Biarritz, France on Sunday. That city, by the way, is surely well stocked with Cadillacs.

As reported by Reuters, the preliminary deal would cut agricultural tariffs and potentially spell a boon for U.S. producers of beef, pork, corn, wheat, wine, and other products. Certain Japanese industrial goods would be exempted from tariffs, as well. The deal aims to generate new demand for U.S. products hit hard by the ongoing U.S.-China trade war, as well as making the United States more competitive with TPP-signed nations.

“If you say ‘win-win,’ it’s a capital letter ‘Win’ for the U.S. and a small-letter ‘win’ for Japan,” former Japanese ambassador to the U.S. Ichiro Fujisaki told The Japan Times.

Not exempted from existing tariffs are Japanese cars and trucks. Inbound passenger cars will retain a 2.5-percent tariff, with trucks saddled with a 25-percent import levy. When asked about the possibility of following through on earlier tariff threats, Trump responded, “Not at this moment, no, not at this moment. It’s something I could do at a later date if I wanted to but we’re not looking at that.”

For the Detroit Three, in this case represented by the American Automotive Policy Council, the preliminary deal sparked a take on the age-old labor question “What have you done for me lately?”

“Any potential trade agreement with Japan should lead to truly reciprocal market access for U.S. automakers,” AAPC president Matt Blunt said in a statement. “It must address long-standing non-tariff barriers in Japan, and include strong and enforceable provisions that prevent Japan from manipulating its currency to gain an unfair and unearned advantage for its auto exports.”

The vast majority of the trade deficit between the U.S. and Japan — $56 billion — stems from the lopsided flow of automobiles.

[Image: Fiat Chrysler Automobiles]

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  • ToddAtlasF1 ToddAtlasF1 on Aug 27, 2019

    It seems like the horses are long gone, so the barn door isn't much of an issue. Ford is killing everything small in the US. GM is Chinese. Fiat is Italian. Various transplants might have opportunities for exports, but I don't see Japan having a growing car market in the future.

  • Slavuta Slavuta on Aug 27, 2019

    The Renegade, on the pic, is built in Italy. Are they bring them here and then ship to Japan?

  • Kwik_Shift Once 15 Minute Cities start to be rolled out, you won't be far enough away from home to worry about range anxiety.
  • Bobbysirhan I'd like to look at all of the numbers. The eager sheep don't seem too upset about the $1,800 delta over home charging, suggesting that the total cost is truly obscene. Even spending Biden bucks, I don't need $1,800 of them to buy enough gasoline to cover 15,000 miles a year. Aren't expensive EVs supposed to make up for their initial expense, planet raping resource requirements, and the child slaves in the cobalt mines by saving money on energy? Stupid is as stupid does.
  • Slavuta Civic EX - very competent car. I hate the fact of CVT and small turbo+DI. But it is a good car. Good rear seat. Fix the steering and keep goingBut WRX is just a different planet.
  • SPPPP This rings oh so very hollow. To me, it sounds like the powers that be at Ford don't know which end is up, and therefore had to invent a new corporate position to serve as "bad guy" for layoffs and eventual scapegoat if (when) the quality problems continue.
  • Art Vandelay Tasos eats $#!t and puffs peters