Initial US-Japan tariff deal reached, Trump says; no word on cars

WASHINGTON • US President Donald Trump said on Monday that Washington had struck trade agreements with Tokyo that could be implemented without congressional approval, but stopped short of assuring Japan that new tariffs would not be slapped on vital car exports.

In a letter to the United States Congress, Mr Trump said he intends to enter into agreements on tariff barriers and digital trade "in the coming weeks", and was notifying lawmakers the tariff deal would be made under a trade law provision allowing the US president to make reciprocal tariff reductions by proclamation.

On a critical issue to Japan, his announcement was left unclear as to whether he has agreed not to impose threatened national security tariffs on Japanese vehicles and car parts. Over much of the past year, the scope of talks has narrowed to exclude the automotive sector, the source of most of the US$67 billion (S$92 billion) US trade deficit with Japan.

Japan's Finance Minister Taro Aso said the deal will not contain a provision on currencies - another worry for Tokyo. Japan wants to avoid any agreement hindering its ability to intervene in the foreign exchange markets in the event of a spike in the yen, or to expand the Bank of Japan's massive monetary stimulus.

Mr Trump's letter did not disclose any content of the agreements, but Japan had previously said it was willing to consider a deal that would reduce agriculture tariffs to levels previously contemplated under the Trans-Pacific Partnership, a trade deal that he withdrew from on his third day in office in 2017.

For the US leader, the signing of even a partial trade deal with Japan centred largely on agriculture would provide some relief to US farmers who have been battered by a 14-month US-China trade war and lost market share.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 18, 2019, with the headline 'Initial US-Japan tariff deal reached, Trump says; no word on cars'. Print Edition | Subscribe