What the US-Japan trade deal means for the world economy | DW News
In Japan, the prime minister has denied reports that he was considering stepping down after his governing party suffered a bruising defeat. Shiger Sheiba says he will remain in office to oversee the implementation of a newly minted US Japan tariff deal. The new deal with the Trump administration will see Japanese products like cars and electronics charged a levy of 15 instead of the current 25. Shares at the Tokyo Stock Exchange surged after the deal was announced. It’s a major deal. Japan will invest massively in the US in return for slashing tariffs on Japanese cars. Japan’s Nikai index surged on the news to a one-year high with major car brands Toyota, Honda, and Mazda leading the charge. No wonder auto exports make up almost a third of all Japanese exports to the US. We are the first country in the world to reduce tariffs on cars and car parts with no limits on volume. We worked on it long and hard and it’s a great deal for everybody. I always say it has to be great for everybody. It’s a great deal. A lot different from the deals in the past. I can tell you that. Japan will invest $550 billion into the US and open its market to goods like cars, trucks, rice, and other agricultural products. Analysts say it’s a win for US farmers, but the deal is unlikely to be a big boost in sales for US vehicle manufacturers. I don’t think that the Japan’s import of the US cars will increase significantly from this. You know the tariff rate on automobiles in Japan is zero and has been zero for like a three decades. So uh there must be some uh structural thing which prohibits US cars to sell well in Japan. either it’s a body size or a few efficiency but you know in in the world you know I don’t expect the US cars to increase shares in Japan in Tokyo newspaper front pages praise the coup Japan being the beneficiary of the first major trade deal with the US talks with even larger US trading partners like China the European Union and Mexico are still ongoing And I have Kate Ferguson with me here from DW Business. Uh Kate, from a Japanese perspective, is that a good deal for them? Yeah, it is. Japan is the largest economy to have reached a trade agreement with the United States since Trump launched his tariff war back in April. And it’s especially good news for Japanese car makers. they are able to swallow this 15% tariff especially because unlike the deal agreed with the United Kingdom there’s no limit on the number of vehicles that can be imported at this rate. Um a lot has also been made of this um Japanese investment in the United States half a trillion dollars going into strategic areas like AI and semiconductors as well as an uh liqufied natural gas project in Alaska. But I think it’s important to add some context here. Japan is already the biggest source of foreign direct investment in the United States. It spent over $800 billion there last year and it’s unclear whether the figure we’re hearing today represents new spending or if it’s simply repackaging existing commitments. Okay, that’s important of course to figure out. Uh US car makers aren’t happy. Why? No, they’re not happy because they feel that they’re now essentially being treated worse than their Japanese counterparts. And that’s because they are currently paying a 25% levy on foreign parts. And if you consider how complicated supply chains are, there’s no vehicle in the United States that’s 100% Americanmade. So from their perspective, the likes of Nissan and Honda and Toyota are now being treated better than they are. And this was really reflected in the stocks as we saw in the report there. Japanese car makers surged on this news. and European uh car stocks were also up on the hope that maybe the European Union could reach a similar deal with the United States. Talking about the European Union, uh there’s also talks going on about um tariffs for the Europeans. Uh is there a chance of the for the EU to reach a similar deal before the August 1st deadline? Oh, this is the big question and interestingly actually today you um EU Commission President Osla Fondonderline met with the Japanese Prime Minister Tiger Ishuba and it’s likely that she was asking the Japanese side for some lastminute negotiation tips because there is a lot at stake here for the EU. Trump is threatening a 30% tariff if no deal is reached before August 1st. And the EU has actually been talking tougher in the last few days. It’s threatened to use what’s called a an um anti-coercion instrument. Essentially, it would allow them to target US digital services. So, there’s a lot at stake. The next few days are going to be really critical and the clock is ticking here. Thank you very much, Kate Ferguson, DW Business.
US President Donald Trump said he had reached a trade deal with Japan on Tuesday. Under the new terms, the US will place a 15% tariff on goods imported from Japan, down from a previously threatened 25% tariff.
00:00 Trump announces Japan trade deal with 15% tariff on imports
02:30 Kate Ferguson, DW Business
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#Japan #Trump #tariffs
22 Comments
Trump is the best president ever ❤
That is not a good deal for Japan.
Great deal for Japan!
They will get one of the best deal for being friendly!!
Trump saying; "long and hard". Me, Stormy and Melania are laughing…
This “deal” does absolutely nothing…
why it's god deal for japan? 😀 they will pay tariff and they will need to invest not in Japan, but in US 😀 😀 wtf.. this is not the deal. it's a joke
These deals have been signed by the Japanese government? Until then, they are just concepts of a deal.
trump may change his mind tomorrow, he is pretty emotional.
Japan "Why do they want to pay more on our Nintendo Switch 2🤔?"
Japan is very pragmatic. Let's see about the EU.
Love Japan.
The “US” car companies need to rediscover which country they are in; some Japanese cars already have more American parts than the “American” cars.
I have no sympathy for them at all.
Where are the Epstein files? We want the Epstein files! 😁
Put an average Japanese in a king size pickup truck, You'll see the answer why no Japanese will buy it. It is not magic. The cars are just simply too big.
EUも現状より関税は下がる方向で既に決まっているような気がします。
Why do "they" match charitable gifts if "they" had the money to begin with?
I is impossible for the EU EC to gain the support of 15 national parliaments even Deutschland was in favour of a 15 % US tariff and rejected 10% two weeks ago and demanded pauses and exemptions but the UK with their two import and export hubs are a major disaster for EU in the absence of agreement and the Russian war against EU will not go away to there is a united Ukraine excluding Crimea and Good Friday agreement .
USA , Russia and BRICS will never be excluded from trade agreements with Ukraine and EU had not the power to exclude USA and India from UK trade agreements but tried hard enough with the EU protocol and border within the UK .
Von Der Leyen said recently that the EU will uphold their values but her values of no agreement will cause a disaster in Europe and to long as the German Fuhrer if that is her values .
The Japanese and Koreans only buy domestic car brands. They won't buy a single American car unless it comes with a .50 cal on top of it.
China, on the contrary, has been buying tens of millions of German, American and European cars in the last decade.
Nothing important
Japan is a colonized state. It doesn’t have a choice at all.
Another victory for the author of "The Art of the Deal". The second greatest book in the world, after the Holy Bible.
so far all the deals are being made in Asia to compete against China not everything also gets disclosed its very likely that all these countries promise to reduce trade with China so they can reach an agreement with the US, its very obvious what Europeans need to do here
So let me get this straight:
– Before Trump tariffs were how much? 0%? 5%?
– Trump imposed 10% on everyone at the beginning.
– Trump threatens to raise it to 25%
– Japan settles on 15% and invest what they already planned to invest before.
– Japan drops some technical tests on imported US cars (bad for safety and environment). But cars were tariff free before.
– Japan imports more agriculture stuff from the US but not more than then established tarriff-free quota already allows.
Result:
– Americans pay between 10-15% more for Japanese cars and imports.
– Japan invests as much as they already planned creating even more competition for American brands.
Congrats
I'd call that Art of the Fail.