Japan govt welcomes US trade pact, carmakers urge more help

Japan's Prime Minister Shinzo Abe and US President Donald Trump signed a trade agreement covering agricultural, industrial and digital trade. PHOTO: AP

TOKYO (AP) - Japanese carmakers on Thursday (Sept 26) urged government officials to do more to support the key industry and their business after their government signed a trade deal with the United States that kept car tariffs unchanged.

Japan's Prime Minister Shinzo Abe and US President Donald Trump, both attending the UN General Assembly in New York, signed a trade agreement covering agricultural, industrial and digital trade.

Japanese car industry has been a main US target of blame, and industry officials were hoping to see car tariffs eliminated, but Japan could only keep them at 2.5 per cent and secure a US promise of no more for now.

Negotiations began last year after Mr Trump complained about the huge American trade deficit with Japan and threatened higher tariffs and other measures.

At a meeting with Japanese trade minister and top officials hours after the signing, Toyota Motor Corp president Akio Toyoda urged the government to do more for the car industry, citing a harsh business environment. Mr Toyoda also heads the Japan Automobile Manufacturers Association.

"The auto industry already faces extremely difficult challenges amid rising Japanese yen, possible impact from the upcoming sales tax increase and other uncertainties," a grim-faced Mr Toyoda said in his opening remarks to the officials.

"We do hope that the Japanese government understands the severe situation and provides us further support to help the auto industry to strengthen its competitiveness and grow as a strategic industry."

Trade Minister Isshu Sugawara and top ministry officials invited heads of carmakers to a meeting in Tokyo to gain their understanding.

Mr Sugawara said the deal would help assure free and fair trade between the nations.

"This pact would promote free and fair trade environment in the area of autos and auto parts between Japan and the United States, and we welcome that," he said.

Mr Trump has sought a bilateral agreement with Japan, the world's third-largest economy, since pulling out of the Trans-Pacific Partnership trade deal after he took office.

Washington wants to reduce a chronic trade imbalance that totalled US$67.6 billion (S$93.2 billion) in 2018, according to US figures.

The two sides reached a basic agreement in late August, but cars remained a major point of contention.

Japan worries Mr Trump might slap new tariffs on its automobiles, which make up a significant amount of its exports to the US.

Japan also has pushed to eliminate the current 2.5 per cent cars and car parts tariff.

At a joint news conference, Mr Abe said he specifically asked Mr Trump and won his reassurance that the pact does not allow additional car tariffs.

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