An initial agreement on trade and tariffs has been agreed upon by the United States and Japan that will either completely remove or bring down the rate of tariffs on some products identified in the deal that are exchanged in trade between the countries. Reports have said that import tariffs on a range of agricultural products will either be eliminated or lowered. Such benefits will also be available to digital products.
A “tremendous” deal has been achieved by the first and third largest economies of the world, said US president Donald Trump.
The trade agreement however had no mention about the possibility of imposition of US tariffs on cars of up to 25 per cent as had been previously threatened by Trump. However, according to media reports, the Japanese Prime Minister Shinzo Abe has assured that the US administration had given him assurances that it would not impose such tariffs on cars exported to the US from Japan.
Discussions on a possible trade deal with Japan had been initiated by the US at the beginning of the year with the aim of Trump being to design a deal that would reduce the trade deficit of the US with Japan which stood at $67.6 billion in 2018.
According to a statement issued by the Office of the United States Trade Representative (USTR), there will either be no duty or preferential tariff imposed on about 90 per cent of the food and agricultural products being exported from t US into Japan according to the deal.
While import tariffs would be immediately removed for certain nuts, fruits and vegetables, Japan will also reduce import duties for products such as fresh and frozen beef and pork imported from the US. In reciprocation, tariffs on some $40 million of agricultural products imported into the US from Japan, including cut flowers, green tea and soy sauce, would either be completely eliminated or reduced significantly.
Abe said there would be a “very wonderful, positive impact on the global economy”, according a transcript published by the White House.
Preferential treatment for certain digital products have also been agreed upon between the two countries. Any import tariffs being imposed on digital products such as videos, music and e-books will be prohibited by the countries and both of the patties will also make sure free flow of data across the pacific.
According to the USTR statement, the US administration said that it it looked forward to negotiating a “comprehensive agreement” with Japan.
Imposition of import tariffs on some foreign-made car and car part imports, which would have included those imported from Japan and Europe, had been contemplated by the Trump administration earlier in the year but have been subsequently postponed.
Car duties were not covered under the new deal between the US and Japan. However reports claimed Abe as saying that he had received assurance from Trump about the his administration not imposing import tariffs on Japanese cars – one of the major exports of Japan into the US.
“Between President Trump and I, myself, this has been firmly confirmed that no further, additional tariffs will imposed,” Reuters quoted him as saying.
(Adapted from BBC.com)