US and Japan agree ‘largest trade deal in history’, says Donald Trump | BBC News

US and Japan agree ‘largest trade deal in history’, says Donald Trump | BBC News

So we start with the latest on trade and tariffs. It’s called the largest trade deal in history by President Trump who is talking about the agreement made with Japan earlier today after weeks of negotiations. It is the most significant deal so far to come ahead of the August 1st deadline. That is the time when steep tariffs will come into effect for countries who have yet to broker a deal with the United States on trade. So, President Trump says under the deal, Japanese goods will now be facing tariffs of some 15%. That’s instead of the 25% tariff the president did threaten Japan with earlier. He also says that they have agreed uh that there’ll be an investment at his direction of this much 550 billion dollars into the US economy. As well as that uh Japan will open up its market to the US goods including cars and rice and other agricultural products. Well, let’s discuss all of this with Jasper uh Cole, who is the expert expert director at Monx Group Japan. Jasper, lovely to see you. So, what’s what’s your thinking on this deal? President Trump says it’s a win-win. Is it? Um, it looks very much like a win-win from Japan’s perspective. Um, you know, obviously 15% tariff is way better than 25%. Most importantly for the car industry the threat was actually 32%. So going from 32 to 15 for the car industry is a very good deal. And also you know President Trump now sort of shows his generosity towards what is after all America’s most important ally here in Asia Pacific. So it’s a win-win. Okay. And we saw that didn’t we displayed on financial markets today in Japan. uh most of the car makers up very strongly indeed. But when the detail comes through, we’ll sort of really learn how this impacts Japan and the United States, won’t we? Because $550 billion investment, that’s a lot of money Japan has to pay into the US. That’s exactly right. Um it’s perfectly possible. Um you know, there’s a couple of interesting projects. you know, most important, a joint development of Alaska gas and oil to be delivered to Japan. There’s also some increased sales of American rice to Japan, which the Japanese people need badly. But then last but not least, very importantly, you’ve got to remember that for the Japanese car industry, um actually the big competition is made in China cars now being very good. And as long as America keeps a made in China cars off the streets of America, Japanese car companies are actually very happy to pay a 15% tariff almost as a price for protection against made in China competition. In the meantime, European Commission President Ursula Vanderine is in Japan. She’s going to be talking trade. She’ll go to China tomorrow and do the same thing. Japan, China, the EU, they’re all pivoting in other directions, aren’t they? as they respond to the threat from the United States. There’s no question that the timing of President Trump announcing the deal, you know, just ahead of the EU getting closer to China, of the EU getting closer to Japan, you know, basically showing that America is on control um of actually being able to divide and rule rather than allowing alliances against the United States to actually come through. Okay. Jasper Cole, great to get your reaction uh to the trade deal that’s been announced uh by the both the US and Japan. Let’s go live now to our Asia business hub. Sirjanna Toari is there for us following every detail as well. Uh Surjanna, let’s start with financial markets. I believe the trading day in Japan is now done. What happened? Yeah, investors really liking the sound of that deal between the US and Japan. uh the Nikk rising almost 4% 3.73% and uh get this Toyota shares up to 13%. I mean Honda and Nissan also uh climbing a lot and we also saw that optimism uh go over to South Korea as well with shares in Hyundai also rising as a result of the deal. Well, South Koreans obviously will be hoping that they can clinch a similar deal to the US and Japan. So, as we heard, a 15% tariff for uh Japanese goods going into the United States, much lower, especially for the auto sector, but there are also some things that were left out. For example, no defense deals uh as part of this agreement. Also, steel and aluminium tariffs remain at 50%. So those are two things that President Trump really wanted to negotiate on but he didn’t get it. And uh Sirjanna the rumors were ri following news of this deal that the prime minister of Japan may soon resign as he feels he’s done his job from that perspective but he’s now denying those rumors. Shigaru Oshiba. So so give us your your take on the turbulence in which this trade deal is is coming. Yeah, absolutely. I mean, when the announcement came, we thought, “Oh, well, he’s really improved his political capital, especially after those elections on the weekend where when he lost uh control of both the upper house and the lower house, his party did, um rather. But, uh yeah, with this trade deal, uh it looked like he was going to gain back some of that political capital. But then there are lots of questions about his leadership. Even now there were media reports that he was going to announce that he was going to stand down. Now uh that’s being walked back quite significantly. But the important thing is with this trade deal, he’s managed to get it over the line. The implementation is the problem because we’ve seen with so many of these so-called deals, they’re actually only really frameworks. They haven’t been signed yet. They’ve been announced by President Trump. They’ve been announced by um other countries leaders. And I should say as well, we also got confirmation of a deal or a framework between the Philippines president and President Trump, which is significant for this region. And this comes uh after the Indonesian deal which was announced last week. We also got details and confirmation on uh uh on that deal as well. and they’re looking at about 19% tariffs going into the United States, which uh allows them to remain competitive with each other, those emerging economies in this region.

US President Donald Trump says the US has agreed to a “massive” trade deal with Japan, one of the country’s largest trading partners.

Japan has agreed to invest $550bn (£407bn) in the US while its goods sold to America would be taxed at 15% when they reach the country – below the 25% tariff Trump had threatened.

Trump said on social media that Japan would open its economy to US goods, including cars, trucks, rice and certain agricultural products.

Subscribe here: http://bit.ly/1rbfUog

For more news, analysis and features visit: www.bbc.com/news

#US #Japan #BBCNews