Trump says US, Japan reach initial agreement on tariffs

Bloomberg

President Donald Trump said his administration will enter into an initial trade accord over tariffs with Japan in the coming weeks while Tokyo warned any final deal must include assurances that Washington won’t slap new tariffs on $50 billion of Japanese auto exports.
In a notice to Congress, Trump also said the US will be entering an “executive agreement” with Japan over digital trade. There was no mention by Trump if he’ll end the threat to impose tariffs on Japanese auto imports as part of the trade deal.
“My administration looks forward to continued collaboration with the Congress on further negotiations with Japan to achieve a comprehensive trade agreement that results in more fair and reciprocal trade between the United States and Japan,” Trump said in the statement released by the White House via email.
Japanese Foreign Minister Toshimitsu Motegi, the country’s point man for the trade talks with Washington, said Tokyo wanted to see the Trump administration lay to rest the threat of new auto tariffs before agreeing to a final trade deal.
“We are aware of the internal process that is going on in the US and the president’s notice of the US-Japan trade negotiations,” Motegi told reporters in Tokyo. He added that language assuring Japan on car tariffs was under consideration.
The threat of steep new US tariffs on imported automobiles and components has loomed over the auto industry and major American trading partners since the Commerce Department in February found those imports could impair national security.
After meeting Japanese Prime Minister Shinzo Abe at the G-7 summit in France last month, Trump announced that the two countries had struck a trade deal “in principle.” The leaders said they hoped to sign the pact on the sidelines of the United Nations General Assembly in New York later this month.
Japanese equities were little changed on Tuesday, with the Nikkei 225 Stock Average mostly flat at 21,982.15.
US Trade Representative Robert Lighthizer has said the limited trade deal will cover agriculture, industrial tariffs and digital trade. The USTR said it had no further comment and Trump provided no details about what was in the initial deal.
Under an earlier proposal, Japan would cut tariffs on US agricultural products, including beef, dairy products, wine and ethanol. The US would cut levies on some Japanese industrial products, but not on cars. Japanese media has reported that the sides had agreed to lower tariffs on US beef to levels offered to members of the Trans-Pacific Partnership.
Abe agreed to direct talks in September 2018 after Trump hit Japan’s steel and aluminum exports with tariffs.