President Donald Trump says that the US has agreed to the “large -scale” trade deal with Japan, one of the country’s largest trading partners.
Japan has agreed to invest $ 550BN (£ 407BN) in the US, while goods sold in the US will be taxed at 15% when they reach the country – Trump threatened by Trump under 25% tariff.
Trump said on social media that Japan would open its economy for American goods including cars, trucks, rice and some agricultural products.
Japan Prime Minister Shigeru Ishiba welcomed The announcement, saying that it was “the lowest figure among countries with the US surplus”.
“I have signed the biggest trade deal in history,” Trump said at a White House program on Tuesday evening, I think perhaps the biggest deal with Japan is the biggest deal with Japan. ”
He said, “He had his top people here, and we worked long and hard on it and it is great for everyone. I always say that it is great for everyone. It’s a great deal,” he said.
Ishiba said that the agreement on Wednesday would mean that American tariffs and parts on vehicles would be cut from 25% to 15%.
However, tax is above 10% Trump imposed on Japan and other countries, when they suspended high so -called mutual tariffs between April and July.
A quarter of Japan’s American exports belong to its important motor vehicle sector, which is about 3% of its economy.
In 2019, the price of its automotive shipment was $ 410BN (£ 300BN), According to US International Trade Administration,
Ishiba said: “We were the first in the world, who were about to reduce tariffs on cars and auto parts without any amount of restrictions.”
The UK cars sent to the US are taxed at a rate of 10% on reaching the US coasts, but it is limited to 100,000 vehicles quota.
Ishiba said: “The agreement does not include no deficiency of tariffs on the Japanese side.”
The American car-marker, however, was not happy with the deal that cuts tariffs on imports from Japan, leaving tax on imports from its plants and suppliers at 25%in Canada and Mexico.
Matt Blunt, Chairman of the American Automotive Policy Council, a group that represents Ford, General Motors and Stellentis, called the Japan agreement “a bad deal”.
The BBC has approached the White House in Washington and the Embassy of Japan for more details of the trade agreement.
The US also announced trade agreements with the Philippines and Indonesia. The Philippines and Indonesia’s US imports will be taxed at 19% on reaching the US.
The White House stated that Indonesia would remove about 99% of tariff obstacles on American goods, while the Philippines deal involves removing tariffs on American car imports.
Shigo Nagai of the research firm Oxford Economics told BBC News that it is Japan’s “best compromise at this level” to bring down its main tariff rate to 15%.
Japan’s employed investment in the US included the declaration “would be a big boost to restore the US, fitting with the story of Trump’s American manufacturing reviving with more jobs,” he said.
In a letter sent to Japan this month, Trump threatened a 25% tariff on the country’s exports to the US, if there was no new trade deal before 1 August, just above the declared rate during its so -called liberation day on 2 April.
The April Tariff Scheme, which included duties on many American business partners worldwide, was prevented for 90 days after the market turmoil. This gave Tokyo’s business representatives time to interact with its counterparts in Washington.
According to the World Bank, Japan is the fourth largest economy in the world behind the US, China and Germany and India, the UK and France.
Japan’s benchmark share index, Nikkei 225, had more than 3% on Wednesday in Tokyo, with a strong advantage for shares in motor industry veterans – including Toyota, Nissan and Honda.
There is a clear deal because Isaba has lost its majority in the upper house of the country in the elections of its Liberal Democratic Party (LDP).
LDP had already lost its majority in Japan’s more powerful lower house.
