Top US and Japanese economic advisors meet in Washington today to discuss trade. The US has sought a bilateral trade
Top US and Japanese economic advisors meet in Washington today to discuss trade. The US has sought a bilateral trade agreement with Japan since last January, when it pulled out of the TPP.
Preliminary talks were held in August, but fundamental differences prevented progress. President Donald Trump has adamantly demanded that Japan lower its trade surplus with the US, which currently sits at $68.9 billion. Mr Trump has targeted the auto industry in particular, which accounts for nearly two-thirds of the surplus. Japan, on the other hand, depends on its auto exports, especially those to the world’s largest economy.
There is little reason to believe the situation has changed since August, leaving Japan wary of a bilateral trade agreement. Thus, expectations for today’s meeting are low.
However, Washington has on numerous occasions demonstrated its propensity for unilateral action—indeed, Mr Trump continues his trade war with China today with 10% tariffs on $200 billion of Chinese imports. In lieu of a revamped trade agreement, the US may well enact duties on Japanese auto imports in the next few months, likely deteriorating relations with an important ally.
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