Japan and U.S. Strike a Deal on Tariff

Japan and the United States reached a deal on tariffs. The both governments agreed on reducing tariff on Japanese products to the U.S. from announced 25 percent to 15 percent. Tariff on Japanese cars will be reduced from 27.5 percent to 15 percent. U.S. President trump recognizes that Japan would make $550 billion of investment to the U.S. and it would receive 90 percent of its profit. The government of Japan will take measures to support Japanese companies affected by the deal.

Trump sent a letter to Japanese Prime Minister Shigeru Ishiba on July 7th which unilaterally noticed that the U.S. would impose 25% of “reciprocal tariff” on Japanese products starting August 1st. Trump agreed on cutting off the rate to 15 percent.

 

On cars, the U.S. already imposed additional 25 percent of tariff on all imported cars including from Japan since April 3rd, making tariff on Japanese cars 27.5 percent in addition to 2.5 percent of basic tariff. After the deal with Japan, it would decline from 27.5 percent to 15 percent. Tariffs on steel and aluminum will be maintained on 50 percent as it has been since June.

 

“Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products,” notedTrump in the social network. He posted it after a meeting with Japan’s top negotiator, Ryosei Akazawa, Minister on Economic Revitalization of Ishiba Cabinet, at the White House on July 22nd. Akazawa visited Trump after a meeting with U.S. Secretary of Treasury, Scott Bessent, in his eighth visit to Washington, D.C. since the bilateral negotiation started in April.

 

Ishiba announced that both governments struck a deal on tariffs. “It will be the lowest rate among the countries with the black in trade balance against the U.S. It is an extremely important agreement,” said Ishiba to the reporters. Japan is going to expand quota for minimum access of rice for the U.S. with expense of other countries’ quota. “This deal does not include any sacrifice of agriculture,” stressed Ishiba.

 

Trump’s announcement on Japan’s investment amounting $550 billion is still not clear about which business it included. Akazawa explained that the businesses include semiconductor, pharmacy, steel, shipbuilding, important minerals, aircraft, energy, cars, artificial intelligence and quantum. It will include purchase of 100 Boeing aircraft. Trump also revealed that Japan would buy billions of dollars of U.S. military equipment. Japan is going to loosen safety standard on U.S. cars, which has been regarded as one of Japan’s non-tariff barriers.

 

It is undeniable that covering 15 percent of additional tariff is not an easy task for Japanese manufacturers. They are supposed to be forced to reduce cost in production. There is an estimation that the tariff will reduce Japan’s GDP by 0.55 percent within a year. Ishiba administration is going to deliver supportive measures for Japanese economy, asking cooperation to the opposition parties.

Comments

Post a Comment

Popular posts from this blog

Dilemma between Alliance and Constitution

  In the new year ministerial online meeting, Japan and United States resolved to work together to deal with various challenges by China. In the Joint Statement of the Security Consultative Committee, or “2+2,” the ministers of both government, US Secretaries of State and Defense and Japanese Ministers of Foreign Affairs and Defense, expressed their concerns on Beijing’s efforts, which were recognized as undermining the rule-based order in Indo-Pacific region and the world. On possible countermeasures, however, there still is a possibility of constitutional dispute in Japan over the principle of exclusively defensive security policy. The ministers referred to their concern about China’s activities in the East and the West China Sea. They reaffirmed to apply Article V of US-Japan Treaty of mutual Cooperation and Security to the Senkaku Islands, and strongly objected to China’s unlawful maritime claims, militarization and coercive activities in the South China Sea. They did not forge...
Read more

Oral Argument against Landfill

Governor of Okinawa Denny Tamaki made an unusual appearance to the court on Monday to submit his opinion on the building of new base for United States Force in Henoko, Nago city. “Execution by proxy of the national government, which violates the independency of Okinawa, cannot be accepted,” said Tamaki in the first oral argument at Naha Branch of Fukuoka High Court on the trial over the request of national government to change the design of new base. Accepting demand from Ministry of Land, Infrastructure, Transport and Tourism, the court closed the trial on the day one.   The national government submitted in 2020 a change of plan for the construction of new base, which was to reinforce the soil of sea base. The government of Okinawa rejected the plan and Tokyo ordered Okinawa accepting it, but Okinawa did not obey, and then Tokyo filed a lawsuit. The Supreme Court decided in September that the order of national government was lawful. Seeing that Okinawa did not approve the plan by ...
Read more

New But Traditional Capitalism

According to the top leader of Japan, the country is going to lead the world with a concept of “new capitalism.” In his annual policy speech to the National Diet on Monday, Prime Minister Fumio Kishida required the people to join his challenge for economic and social change, to which he believed the world to be stepping forward. However, his challenge looks to be relatively leaning on traditional growth-oriented policies, lacking strong momentum for wealth distribution to every corner of Japanese society.      Kishida tried to sell his new capitalism as the key to economic revitalization. He listed various hazards the world was encountering; wider gap and poverty brought by dependence on market economy without fair distribution, shortage of mid- or long-term investment caused by putting priority on efficiency of competitive market, losing sustainability, arial gap between the urban and the rural, serious climate change with pressure on the nature, and crisis of healthy de...
Read more