Asia Minute: A Limited Trade Deal for U.S. and Japan

Sep 26, 2019

President Trump says the United States and Japan have reached what he calls the “first stage of a phenomenal new trade agreement.” But the full details are a little less clear.

The United States and Japan have a trade deal, but a very limited trade deal. President Trump told reporters “this is a big chunk, but in the fairly near future we’re going to be having a lot more comprehensive deals signed with Japan.”

The reaction from Japan’s government is a bit more restrained. Prime Minister Shinzo Abe did call the agreement a “win-win solution for Japan and the United States” — but the prospect for a bigger deal remains uncertain.

The president says the current understanding will open new markets to some 7-billion dollars in U.S. agricultural products — while tariffs will be coming down on products from beef and pork to corn and wine.

A broad arrangement on digital trade is also part of the discussions. But there is an elephant in the room – actually, it’s more like a Toyota.

The current deal doesn’t say anything about autos and auto parts — which are currently and historically the biggest part of the trade imbalance between the two economies.

That may prove a more difficult set of negotiations.

According to U.S. government figures Japan had a trade surplus with the United States last year of nearly 68-billion dollars.