US President Donald Trump has announced a “massive” trade deal with Japan, with the country agreeing to invest $550 billion in the US while lowering its tariffs on American goods. The new agreement will tax Japanese goods sold to America at 15%, below the 25% tariff Trump had threatened earlier.
Under the deal, US car-makers are unhappy as it cuts tariffs on imports from Japan but leaves taxes on imports from their plants and suppliers in Canada and Mexico at 25%. Matt Blunt, president of the American Automotive Policy Council, called the Japan agreement “a bad deal”.
However, Japan’s Prime Minister Shigeru Ishiba welcomed the announcement, saying it was a “great deal for everybody”. The agreement includes a significant investment from Japan in the US, expected to boost US manufacturing and create jobs.
The new tariff rate is above the 10% Trump levied on Japan and other countries when he suspended higher reciprocal tariffs between April and July. But Ishiba said the agreement does not include any reduction of tariffs on the Japanese side.
Japan’s automotive sector accounts for a quarter of its exports to the US, with $410 billion worth of shipments in 2019. The new deal is seen as a compromise by some experts, with Shigeto Nagai from research firm Oxford Economics calling it Japan’s “best compromise at this stage”.
Source: https://www.bbc.com/news/articles/cpwq4dljjdko