Trump optimistic about US-Japan trade deal by May

VIDEO: REUTERS
Trump meets Abe (left) in the Oval Office at the White House in Washington.
Trump meets Abe (left) in the Oval Office at the White House in Washington.PHOTO: REUTERS

WASHINGTON - The United States and Japan could ink a new trade deal very quickly, said President Donald Trump, who expressed confidence that the two countries could work through their differences over trade barriers such as automobile and agriculture tariffs on Friday (April 26).

Speaking in the Oval Office alongside Japanese Prime Minister Shinzo Abe, who is in Washington, Mr Trump said: “I think it can go fairly quickly.”

Mr Trump added that the deal could be signed when he makes a state visit to Japan next month from May 25 to 28, when he will be the first world leader to meet Japan’s new emperor Naruhito after he is enthroned.

Both countries have been seeking a quick trade deal, and their negotiators met for a second round of trade talks this week ahead of Mr Trump and Mr Abe’s meeting.

Japan’s Economy Minister Toshimitsu Motegi and US Trade Representative Robert Lighthizer met on Thursday in Washington, on the same day that Japanese Finance Minister Taro Aso and Treasury Secretary Steven Mnuchin had a discussion about linking trade and currencies.

Japan wants its steel and aluminium to be exempted from US tariffs imposed last year, and to dissuade Mr Trump from slapping his threatened 25 per cent tariffs on cars and car parts.

The Trump administration wants to reduce the trade deficit the US has with Japan.

Meanwhile, US exporters have also become relatively disadvantaged after Mr Trump pulled out of the Trans-Pacific Partnership - which both the US and Japan had been part of - on the first day of his presidency in 2017. As a result, the remaining 10 members of the trade pact, including agriculture exporters like Canada, have more favourable access to the Japanese market.

 

“Japan puts very massive tariffs on our agriculture, going for many years, going into Japan.  And we want to get rid of those tariffs,” said Mr Trump, who added that the US did not put tariffs on its import of Japanese cars.

Mr Abe corrected him afterward, saying that Japan put no tariffs on American cars but the US had in contrast put a 2.5 per cent tariff on Japanese automobiles.

The prime minister also reminded Mr Trump that Japan was America’s top investor, and that the US$23 billion (S$31 billion) in investments announced by Japanese businesses would create 43,000 jobs in the US.

Japanese car companies in particular were investing a lot, acknowledged Mr Trump, who cited Toyota’s plans to invest US$13 billion over five years in car manufacturing in several states in the Rust Belt and the South.

Said Mr Abe through a translator: “In any case, we would like to proceed with the further negotiation that we are now having for that.  We'll see a mutually beneficial outcome for both of our countries.”

Mr Trump struck a similarly optimistic tone, saying: “Ultimately, we have a chance to make a very good and long-term trade deal with Japan.”

Both leaders were effusive in their praise for each other despite their trade differences, with Mr Abe saying that he looked forward to a Saturday morning round of golf with Mr Trump, and Mr Trump twice calling the Japanese leader his friend.

Mr Abe and his wife Akie later joined Mr Trump and First Lady Melania for a private dinner to celebrate Mrs Trump’s birthday.

Mr Trump’s upcoming state visit will show that “the bond between Japan and the United States, under our alliance, will remain unwavering”, said Mr Abe.

“We will demonstrate our strong commitment to addressing various challenges that we see in the international community,” he added.

Mr Trump said that they would discuss North Korea in the meetings immediately after their comments to the media.

The two leaders were also expected to discuss energy cooperation, digital connectivity and infrastructure investment in the Indo-Pacific region, a senior administration official told reporters on Thursday.

Mr Trump is expected to visit Japan again in June to attend the G-20 summit in Osaka.