U.S. President Donald Trump and Japan Prime Minister Shinzo Abe have agreed to open up trade talks between the two countries with a particular emphasis on U.S. auto exports to Japan. While the U.S. currently imposes a miniscule 2.5-percent tax on imported Japanese-built automobiles, Japan doesn’t have any tariffs in place to affect the sale of U.S.-built cars there, yet even still, Japan has faced criticism from some of being too closed-off to cars from the U.S. with its so-called “non-tariff barriers”.
After the talks, trade between the two countries “can only be better for the United States, because it couldn’t get any worse than what has happened over the years,” Trump told reporters recently. A joint statement from the countries said that the U.S. is entering talks with the goal of expanding access for U.S.-built automobiles in Japan, giving a boost to domestic vehicle production, and that Japan’s aim is to grow the market for its agricultural exports in the U.S.
Japan initially resisted entering into bilateral trade talks with the U.S., but has agreed to have the discussions in order to stave off tariffs that the Trump administration has threatened to levy on Japan-built automobiles coming into the U.S., sources have told Bloomberg. The European Union made a similar arrangement back in July, getting the Trump administration to hold off on imposing any new tariffs by agreeing to enter into trade talks with the U.S.
President Trump withdrew the U.S. from the 12-nation Trans-Pacific Partnership (TPP) trade deal early in his presidency, throwing away at least one provision – relating to how Japan certifies imported automobiles for legal sale to its public – that might have helped lower the barrier to entry for U.S. automakers. The other 11 countries involved in the trade deal, unable to ratify the TPP without the U.S., pressed on with a new trade deal carrying most of the same provisions as TPP.
General Motors sells a handful of automobile models in the Japanese market, including Chevrolet, Buick, and Cadillac models, but a majority are left-hand-drive only, even though Japan is a RHD market.