Revised Reciprocal Tariffs Activated

Donald Trump administration of the United States activated “reciprocal” tariffs, ranged between 10 percent and 41 percent, on all imported goods on August 7th. It did not include special measures to mitigate damage on Japanese products, which had been agreed by both sides on July 22nd. Although Trump administration admitted that the drop of the special measures for Japan from the executive order was a mistake, it is not sure when the executive order will be corrected. 

In the agreement on July 22nd, both government of Japan and the U.S. hit a deal that tariffs on all the Japanese products would be reduced from alleged 25 percent to 15 percent, including cars which had been imposed 27.5 percent of tariff. Japanese government explained that the agreement was mostly the same as the deal between the U.S. and European Union, in which the tariff beyond 15 percent will not be changed.

 

New tariff rate announced by the U.S. administration was imposing 10 percent basic tariff on all the imported products and additional “reciprocal” tariffs on specific countries. Although tariff rate on Japanese products would be 15 percent, it was not clearly noted that additional tariffs would not be on the products with tariffs higher than 15 percent. In Trump’s Executive Order on July 31, the special measures were applied only to E.U.

 

For instance, 26.4 percent of tariff has been imposed on Japanese beef. In the new tariff policy, the rate would be 41.4 percent, 15 percent higher than the previous level, instead of reduced to 15 percent. Tariff on Japan-made optical fiber will rise from 6.7 percent to 21.7 percent, going beyond 15 percent line. It is still unclear whether tariffs on cars would be reduced to 15 percent.

 

Japan’s chief negotiator on tariff issue, Ryosei Akazawa, made a visit to Washington, D.C. early August. In the press conference after the meeting with U.S. Secretary of Commerce, Howerd Lutnick, and Secretary of Treasury, Scott Bessent, Akazawa announced that the special measures on Japan would be applied later. Akazawa explained that the U.S. side would correct the order “in an appropriate time.” Although the new tariff rate has been imposed on Japanese products from August 7th, the U.S. will compensate it.

 

Settling the negotiation with the U.S. is the biggest cause for Prime Minister Shigeru Ishiba to keep his position as the supreme leader of Japan. Akazawa did not indicate exactly when the U.S. would correct the tariff rate, possibly with consideration not to determine the time when Ishiba’s biggest cause would be settled. As long as the correction of the executive order is not made, Japanese companies will be imposed high tariffs on their products, making their trade balance worse.

 

The opposition parties have been demanding Ishiba to exchange a written agreement on tariffs with Trump. “It is very strange that Ishiba has not had a meeting with Trump,” said the leader of Constitutional Democratic Party of Japan, Yoshihiko Noda. No written agreement may damage Japanese economy. Settling the negotiation may accelerate argument for replacing Ishiba. The prime minister is caught in a dilemma.

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