Trump: US, Japan Close to Reaching Trade Deal

April 28, 2019 Updated: April 28, 2019

WASHINGTON—The United States and Japan may reach a trade deal “fairly quickly” and sign an agreement as early as next month, President Donald Trump said April 26 before his meeting with Japanese Prime Minister Shinzo Abe at the White House.

Trump hosted Abe on April 26 and 27 for a series of bilateral talks, including trade and regional security. The two leaders will meet again at the end of May in Japan.

“We have a very big trade negotiation going on right now with Japan, which is, I would imagine, the primary reason that the prime minister is here,” Trump said during a joint press meeting with Abe.

When asked about the time frame for a deal, Trump said, “it can go fairly quickly. Maybe by the time I’m over there. Maybe we sign it over there. But it’s moving along very nicely.”

The president and First Lady Melania Trump will make a state visit to Japan at the end of May to meet Japan’s new emperor, Naruhito.

In September 2018, Trump and Abe agreed to begin negotiations for a bilateral free-trade agreement. U.S. and Japanese negotiators held a second round of trade talks in Washington last week focusing on agriculture and autos.

“We’ll be discussing, very strongly, agriculture,” Trump said. “Because, as the prime minister knows, Japan puts very massive tariffs on agriculture—our agriculture—going for many years.”

Japan is the fourth largest trading partner for agriculture, according to the U.S. Department of Agriculture. In 2018, the United States exported $12.9 billion worth of agriculture products to Japan.

The country maintains high tariffs that hinder U.S. exports of agricultural and other food products to its market, stated a report by the Office of the U.S. Trade Representative. These high tariffs include grains, sugar, citrus, wine, dairy, and a variety of processed foods.

“We want to get rid of those tariffs,” said Trump. “But this should have been done by previous administrations. … It’s been a long time, but I’m sure we’ll be able to work that out.”

In 2018, the United States had a $67.6 billion trade deficit in goods with Japan, the fourth largest trading partner behind China, Mexico, and Germany.

Automotive Tariffs

Trump’s tariff on steel and aluminum imports and threats to impose levies on Japanese cars put pressure on Tokyo to enter bilateral trade talks with Washington in 2018. Abe had resisted a bilateral agreement, preferring a multilateral trade pact with the United States under the Trans-Pacific Partnership.

Trump, however, walked away from the partnership shortly after taking office in early 2017. Trump’s tariff strategy has helped bring Abe to the negotiating table for a bilateral trade deal.

With respect to auto tariffs, Trump said that Washington was not imposing new levies on Japanese cars, so “I think it’s something we’ll work out.”

In response to Trump’s comments, Abe said, “Japan has put no tariffs on American autos. But, in contrast, the United States has put on the 2.5 percent tariff on the Japanese autos.”

“But, 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,” the Japanese leader said.

The auto industry is vital for Japan’s manufacturing and economy. Automotive exports to the United States are a key source of growth for the country, accounting for nearly 1 percent of its gross domestic product.

Abe said Japanese businesses have invested $23 billion in the United States and have supported an additional 43,000 jobs since Trump took office.

“Japanese car companies are coming in at a level that we haven’t seen in many decades,” said Trump. “Toyota is investing $14 billion over a short period of time, and others too. They’re going to Michigan. They’re going to Ohio, Pennsylvania, North Carolina, South Carolina, Kentucky.”

‘Deepening Our Global Partnership’

The United States and Japan account for nearly 30 percent of the global economy. A strong bilateral tie between both economies is key for “global peace, stability, and prosperity,” a senior administration official said during a call with reporters last week.

“This is really about deepening our global partnership with Japan. It’s also about our alliance, our partnership, and the president’s personal friendship with Prime Minister Abe,” he said.

Both leaders also discussed how to further expand their cooperation to denuclearize the Korean Peninsula and explore partnerships on energy, digital connectivity, and infrastructure investment to promote a free and open Indo-Pacific, according to the White House.

The priorities for the upcoming Group of Twenty (G-20) meetings were also part of the discussions. Osaka, Japan, will host the next G-20 summit in late June.

This May, Trump and the first lady will visit Japan as the first state guests following the enthronement of Emperor Naruhito. Emperor Akihito, 85, is ending his three-decade reign and his son Crown Prince Naruhito, will ascend to the throne on May 1. Trump’s visit will follow a few weeks after the enthronement.

Trump said he initially was not intending to go Japan’s “big event,” however he was convinced to go when Abe told him that it was 100 times bigger than the Super Bowl.

Abe said it was a historic and tremendous event for everyone in Japan. It is the first time in nearly 200 years that an emperor has abdicated.

The Japanese leader and his wife also attended a White House birthday dinner on April 26 for First Lady Melania Trump. Trump and Abe played golf the next day at the president’s private club in Northern Virginia.

Follow Emel on Twitter: @mlakan
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