- The US and Japan announced intentions to start negotiations on a new free trade agreement on Wednesday.
- The announcement came after a meeting between President Donald Trump and Japanese Prime Minister Shinzo Abe.
- The joint announcement suggests that the two countries would not impose new tariffs on each other during the course of the agreement.
- Trump and Abe’s deal comes against the backdrop of the growing trade war between the US and China.
The US and Japan announced Wednesday that the two countries plan to negotiate a bilateral free trade agreement as part of President Donald Trump’s bid to reshape American trade policy.
Following a meeting between Trump and Japanese Prime Minister Shinzo Abe, the US and Japan released a joint statement announcing the start of talks.
“The United States and Japan will enter into negotiations, following the completion of necessary domestic procedures, for a United States-Japan Trade Agreement on goods, as well as on other key areas including services, that can produce early achievements,” the statement said.
Robert Lighthizer, the US Trade Representative, told reporters that the administration planned to seek fast-track trade negotiation powers from Congress under the current Trade Promotion Authority. This would allow Trump to make a deal subject only to a majority vote in Congress. The full negotiation process is likely to take months or years.
The move comes during a period of serious upheaval for US trade policy. Trump initiated a trade war with China in July that shows no signs of slowing down, and steel and aluminium tariffs on all imports to the US have strained relationships with allies.
But this is also the second attempt by Trump to try and deescalate those tensions. In July, Trump and European Commission President Jean-Claude Juncker announced a preliminary trade agreement designed to get the allies on the same page. No formal free trade deal has emerged from that handshake agreement.
In addition, the statement appears to block the imposition of additional tariffs during the negotiations.
“The United States and Japan will conduct these discussions based on mutual trust, and refrain from taking measures against the spirit of this joint statement during the process of these consultations,” the two sides said. “In addition, we will make efforts for the early solution of other tariff-related issues.”
While the development does not reverse Trump’s tariffs on imports of steel and aluminium, the statement indicates that the US would not impose further tariffs on Japan over the course of talks. This is particularly important given the ongoing investigation by the Trump administration into tariffs on imported autos and auto parts.
Japanese carmakers in particular were worried about the possible effects of a new auto tariff on their businesses.
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