Global Lens | Japanese Economist On USA-Japan Trade Deal That Set Tariffs At 15%

Global Lens | Japanese Economist On USA-Japan Trade Deal That Set Tariffs At 15%

Shifting focus now, US President Donald Trump has announced a flurry of uh trade agreements with Japan, Indonesia, and Philippines after months of turmoil. These deals ease the tensions for some of Asia’s largest manufacturing hubs. A deal with India remains stalled, and sources have said that any deal before the August deadline is unlikely. President Trump announced a deal with Japan that will involve the US imposing a 15% tariff. This is less than the 25% tariff announced earlier. More importantly, automobile imports from Japan will attract a 15% tariff. All other nations face a 25% tariff. This is crucial for Japan as automobiles account for 30% of all shipments to the US. Trump also announced that Japan will invest $550 billion in the US largely in energy projects. Trump claimed that US will keep 90% of the profits from these investments without providing further details. The US will also reduce the tariffs on Indonesia. As per the deal, tariffs will come down from the 32% imposed earlier to 19% for the Philippines. The cut in tariff is minor. According to the deal announced by Trump, tariffs will reduce from 20% earlier to 19%. With this, the US has now signed a framework for trade deals with at least a half a dozen countries. A 3-month interim deal with China reduced tariffs to 30%. China is imposing a 10% tariff on US goods in return, but this deal expires on the 12th of August and US has already hinted at a potential extension. The UK faces a 10% tariff and Vietnam faces 20% tariffs. In a move that could ease the tensions between the world’s two largest economies, President Trump hinted that he could travel on a bilateral state visit to China in the coming days. Joining me now to discuss the US Japan trade deal further is Norihiro Yamaguchi, the lead Japan economist at Oxford Economics. Uh, thank you very much for joining us Mr. Yamaguchi. Let me start by asking you, would you say this is a fair deal for Japan? I would say the conclusion was quite fair for Japan. you know uh Japan has been threatened with 25% by the US but it turned out the the deal was reached at 15%. And what is important is that the individual product tariff on the auto product was also lower to 15% from 25 and this is quite important for Japanese economy because it it is one of the you know most important uh industry in Japan. How do you think this will help the Japanese automobile industry? Right. So compared to the threatened uh tariffs and also the ongoing tariff rate of 25% uh 15% uh is uh kind of reasonable you know the Japanese in fracture rate uh by this amount and the Japanese auto industry have been absorbing this uh fluctuation in the yen. Sometimes it’s favorable, sometimes not it’s not. So, uh overall I think uh the 15% for the auto industry was quite you know reasonable for the United States has so far announced deals with Indonesia, Vietnam, Japan and Philippines overall. How will these deals rebalance trade between US and South Asia? And will the US really be a gainer? Right. But uh important thing to note is that the US China there has not uh agreed yet and uh also the US and EU are still uh doing the negotiation. So uh with this in mind uh probably the global uh you know trade policy uncertainty is likely to remain which will limit the global uh economic growth. How will these deals impact the trade relationship of Vietnam, Indonesia, Japan and Philippines with China? uh so with China uh I don’t think there will be a significant uh impact in ter in terms of the you know uh relationships and uh what’s uh more important is that whether China will uh increase exports to this country because they are still facing the high tariff rate in the states and if uh that things uh continue to happen then uh there could be a diplomatic tension between China and other neighboring economies. Japanese Prime Minister Shageru Ishiba is likely to resign after his coalition lost majority in the election to the upper house of parliament. How does this impact the implementation of this trade deal? Right. So actually this uh US uh Japan trade negotiations was his uh resent uh for being the prime minister even after defeating and now this uh negotiation has concluded uh I think he he will resign rather quickly as early as in August but uh you know the uh package is already signed so uh I think uh this will stay there considering the volatile political situation in Japan right now, who is likely to take over as prime minister and is a general election close? Uh yes. So uh the political situation is uh still quite unclear and uh you know the what was seen during the election was that the rightwing uh parties is quite you know emerging quickly and with this in mind uh probably uh the policy uh the you know the including the economic policy monetary policy will uh move toward loser fiscal management and also could be uh could make it more difficult for the Bank of Japan to impose any of the rate hikes ahead. All right, thank you very much for joining us Mr. Yamaguchi with your views on how this trade deal between US and Japan is going to help the Japanese economy and also the political situation and economic challenges for uh the next person who will be leading Japan as prime minister. A quick look.

US signs a flurry of trade agreements with Japan, Indonesia, and the Philippines, reshaping tariff contours in Asia. Japan avoids a steep 25% tariff—settles at 15% Indonesia & Philippines agree to 19% tariffs. Parikshit Luthra decodes the implications with Norihiro Yamaguchi.

#japan #usa #japanusa #usajapan #tradedeal #trumptariffs #donaldtrump #uspresidentdonaldtrump #cnbctv18digital #cnbctv18

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