Challenges remain after 2nd round of Japan-US trade talksーNHK WORLD-JAPAN NEWS
Leo, what stood out to you about the second round of talks? Well, there are two main points I want to focus on. The first and most important is the auto tariffs. We’re still waiting for more updates from the US and Japan delegations, but it’s unclear whether the US has put the elimination of auto tariffs on the table. That’s Japan’s biggest priority. The second is the deadline. Akazaba mentions the possibility of an agreement being reached as early as June. That reflects the pressure both sides are feeling to strike a deal as soon as possible. Japan wants to quickly ease the effects of the auto tariffs which went into effect in April. Akazawa says automakers are losing $1 million per hour. Meanwhile, the Trump administration has its own reasons for wanting a quick resolution. The US economy recorded negative growth through the first quarter of the year and people are starting to talk about a possible recession. Public disappointment is growing over his handling of the economy even among his core supporters and his approval rating in is sliding. But stark differences remain between the two sides. Akatava says intestive working level talks will start tomorrow in an effort to try to narrow these gaps. And how are they going to overcome these differences? Well, Japan is trying to speed up the talks by compiling its own list of measures it is willing to consider. They include modifying Japan’s auto safety and EV charging standards and simplifying the screening process for imported vehicles. A big point of contention is rice. Japan wants to protect the interest of domestic farmers, but for the US, access to the Japanese market is seen as something of a symbolic goal. Japan could also be willing to increase imports of soybeans, corn, and bofuel. US exports of those products are expected to shrink heavily due to the trade dispute with China. Also, there might be demands in the financial sector. Finance Minister Kato Katsunobu and the US Treasury Secretary Scott Bessant have held separate talks on this topic. Japanese officials are carefully monitoring the comments of Stephen Myan who currently serves as chair of the Council of Economic Advisors. He’s considered one of the fatigue minds behind Trump’s economic policy. He made a speech last month saying the US has been providing two major global public goods, one a security umbrella, and two, a reserve currency. He demanded that other countries share the costs and burdens. And how do you think the talks will proceed from here? Well, the goal is to be able to announce at least a temporary agreement at the G7 summit in mid June. But with the Japanese upper house election coming in July, it’s unclear whether Japan will be able to make major concessions, especially in the agricultural sector. Japan wants to make sure that if an agreement is reached this time, it won’t be undermined by additional demands. The two countries struck a deal called TAG or the trade agreement on goods during Trump’s first term. But when he returned to the White House this year, he started blaming Japan for trade restrictions on cars and made misleading statements about rice tariffs. A new agreement should strengthen ties and restore trust between the countries.
Japan and the US have wrapped up the second round of their trade talks. Both sides are eager for a deal, but they remain far apart on several crucial issues. NHK World’s Senior Economic Commentator Sakurai Reiko breaks down how negotiations will proceed.
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