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World Japan's embrace of bilateral trade talks with U.S. spares it from tariffs

Japan appeared at first blush to have acquiesced to U.S. pressure and the threat of tariffs on imported cars by agreeing to start two-way negotiations to “promote Japan-U.S. trade.”

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TOKYO — When Japan agreed to enter into bilateral trade talks with the United States during meetings at the U.N. General Assembly on Wednesday, the country’s prime minister, Shinzo Abe, appeared to have finally said “yes” after two years of saying “no.”

Japan has consistently insisted it was not interested in entering into bilateral trade negotiations with the United States. Instead, it has repeatedly invited the United States to re-enter a broad trade pact among 11 countries from which President Donald Trump withdrew during his first week in office.

Japan appeared at first blush to have acquiesced to U.S. pressure and the threat of tariffs on imported cars by agreeing to start two-way negotiations to “promote Japan-U.S. trade.”

Japan was “chased into a corner,” wrote Taketsugu Sato, national security correspondent for The Asahi Shimbun, a left-leaning Japanese newspaper. The Nikkan Gendai, a daily tabloid, went further, calling Abe a “traitor.”

Yet by agreeing to open the talks, Japan received a reprieve from the looming auto tariffs as long as the talks continue. And American officials also accepted Japan’s insistence that it would not go any further than its previous commitments in the multilateral trade deal — known as the Trans-Pacific Partnership — to open up its markets for agricultural and forestry imports from the United States.

Some analysts suggested Japan had effectively performed a bit of diplomatic jiu-jitsu, giving the appearance of compromising while wrangling concessions from the U.S.

For Trump, “these are good optics but bad content,” said Jeffrey Wilson, a research fellow at the Perth USAsia Center at the University of Western Australia.

Certainly, deferring auto tariffs gives Japan some immediate breathing room.

Industry analysts had said that if the Trump administration imposed a 20 percent tariff on Japanese auto exports, manufacturers’ costs could go up by $8.6 billion. SMBC Nikko Securities estimated that if automakers passed on such costs to customers, Japan’s car exports would decline by 200,000 units, cutting manufacturers’ profits by about 2.2 percent.

Analysts said that Trump could present any deal that results from the talks with Japan as a new victory in efforts to get other nations to buckle on trade.

This article originally appeared in The New York Times.

Motoko Rich © 2018 The New York Times

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