Key points
- Japan welcomes implementation of deal
- Toyota urges further tariff reductions
- Japan pledges $550b US investment
ISLAMABAD: Lower US tariffs on Japanese autos kicked in on Tuesday, as a relieved Tokyo welcomed the implementation of a trade pact negotiated with Washington.
Since returning to the presidency in January, Trump has targeted specific sectors with tariffs, and imported automobiles and parts face a 25 per cent duty.
According to Channel News Asia, this dealt a blow to Japanese automakers, for whom the 25 per cent duty piled atop an existing 2.5 per cent tariff – bringing the overall level to 27.5 per cent.
Under the new deal, the United States has agreed to lower tariffs on Japanese automobiles and parts to 15 per cent from the current 27.5 percent.
“The government welcomes US efforts this time towards the steady implementation of the July 22 Japan-US deal,” chief government spokesman Yoshimasa Hayashi told reporters.
Still a pain
While the outcome marked a win for Japan, the levies will still cause huge pain for the nation’s industries, with car titan Toyota telling AFP in a statement that it hoped they could be lowered further.
“We hope that the environment surrounding the automotive industries of both Japan and the United States will continue to improve going forward, based on open and free trade, including further tariff reductions,” the firm said.
Japanese business lobbies also said they wanted Tokyo to push on with tariff negotiations.
Separate 10 per cent tax
For goods falling outside specifically targeted sectors, Trump has also imposed a separate 10 per cent tax on imports from nearly all trading partners.
That rate was hiked again in August to various higher levels for goods from dozens of economies, including the European Union and Japan.
The move left Japanese products facing a 15 per cent tariff that was tacked onto existing duties for many goods.
While the two countries initially unveiled a trade pact in July, they appeared to diverge in their understanding of its details, such as whether the duties would generally stack on existing tariffs for certain products.
Japan’s tariffs envoy Ryosei Akazawa previously told reporters that Washington was expected to revise the rule.
The new US order that took effect Tuesday sees a 15 per cent tariff cap instead for many products, applying retroactively to August 7.
Under the terms of the US-Japan deal, Tokyo is also expected to make investments worth $550 billion in the United States, according to the White House.
Top Japanese power generation company JERA said last week it had signed an initial agreement aimed at buying liquified natural gas from a huge pipeline project in Alaska.
