BREAKING NEWS: U.S. tariff on Japanese cars to be cut to 15% from 27.5%: source
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Spectator
7 minutes ago
- Spectator
The US trade deal may come too late for Japan's prime minister
Relief. That was the overriding emotion in the Japanese financial markets and society at large today when, after months of speculation and discord, a trade deal was finally struck between President Trump and Japanese Prime Minister Shigeru Ishiba's trade representative Ryosei Akazawa. The Japanese envoy, who has made eight trips to Washington in pursuit of an agreement, finally pulled it off just a week before the 1 August deadline (after which a hefty 25 per cent levy would have been imposed on all Japanese goods to the US). With the deal, that will be reduced to a probably manageable and reciprocal 15 per cent. Included in the package was an agreement that Japan would invest $550 billion in the US (details to be announced). The immediate market reaction to the agreement was very positive. Asian (not just Japanese) stocks were significantly up, with the automakers doing especially well. The Nikkei rose 3.5 per cent and finished at around 41,000, just 1,000 points off its record high. Futures trading on the Osaka exchange rose by around 4 per cent. All told, it was a good day for the money men, though with the details still be clarified, how long this will be sustained remains to be seen. For those not employed or invested in financial services though, there is relief of a different sort. The tariff episode has damaged what had been an, if not exactly 'special relationship', then certainly a generally warm and cooperative partnership between Japan and the US that people here had come to rely on. Japan was apparently Trump's favourite country of those he visited in his first term, thanks partly to the reasonable press he received and the lack of protests in the street. There was also a personal 'odd couple' (Felix and Oscar style) chemistry between Trump and former Japanese premiere Shinzo Abe that was as palpable as it was amusing. That was then; the mood has since changed considerably. Ishiba's comment early on in the trade dispute that Trump's policy was 'difficult to understand' was an understatement that hinted at a sense of betrayal. The daily media coverage in the press and on national broadcaster NHK has become much more critical of Trump 2.0. The prospect of a new era with a relationship based solely on the narrow focus on trade figures was disturbing here in Japan for more than simply economic reasons. To the generally pro-American Japanese, it felt like a chilling reclassification of what they had thought was a deep-rooted alliance. The pain was especially acute in political circles as Republican presidents had always been seen as especially supportive (there has a been a degree of animus against Democrats ever since Bill Clinton skipped Japan on an Asian tour in 1998). In light of this, Trump's heralding of the deal as confirming that 'we will always have a great relation with the country of Japan', though it may be a pro-forma statement, will reassure the disillusioned to some extent, and there will be hope that things can be patched up. Wise observers will question, though, how great the deal really is, and whether it was finalised less out of loyalty to an old friend as out of the need for Team Trump to chalk up a big win as the August deadline loomed. A visit to Japan to further heal the wounds might not be a bad idea, but if such a meeting occurs, it is not clear that Ishiba will be the one to greet the Donald at Narita airport. The trade deal comes a little too late to help him and he remains, after a bruising Upper House election, on resignation watch. Ishiba's coalition government came close to hanging on to their majority in Sunday's vote but failed, and the parliamentary arithmetic is now dismal. Along with coverage of the trade deal, Ishiba will have read in the morning papers of a poll that puts his cabinet at their lowest approval rating since he took office. This seems a little unfair. Heads will be scratched over why, unless some sort of last-minute magic was worked by Akazawa at his meeting in the White House on Tuesday, which seems unlikely, the deal could not have been announced before the election? It could be that Trump and Ishiba just didn't take to each other. There is a distinct lack of warmth between the two men. Ishiba even snubbed Trump by leaving a Nato summit early, when a meeting was predicted, and declining to fulling endorse the US bombing of Iranian nuclear installations. Ishiba certainly didn't go out of his way to flatter Trump, which many here respect. The deal may be the best that could have been achieved in the circumstances. But all that will count for naught if, as expected, Ishiba is soon forced out to join the very long list of short-lived Japanese prime ministers.
Leader Live
7 minutes ago
- Leader Live
Donald Trump announces trade deal with Japan
'This Deal will create Hundreds of Thousands of Jobs – There has never been anything like it,' Mr Trump posted on Truth Social, adding that the United States 'will continue to always have a great relationship with the Country of Japan'. The president said Japan would invest 'at my direction' 550 billion dollars into the US and would 'open' its economy to American cars and rice. The 15% tax on imported Japanese goods is a meaningful drop from the 25% rate that Mr Trump, in a recent letter to Japanese Prime Minister Shigeru Ishiba, said would be levied starting on August 1. Early Wednesday, Mr Ishiba acknowledged the new trade agreement, saying it would benefit both sides and help them work together. With the announcement, Mr Trump is seeking to tout his ability as a dealmaker — even as his tariffs, when initially announced in early April led to a market panic and fears of slower growth that for the moment appear to have subsided. Key details remained unclear from his post, such as whether Japanese-built cars would face a higher 25% tariff that Mr Trump imposed on the sector. But the framework fits a growing pattern for Mr Trump, who is eager to portray the tariffs as a win for the US. His administration says the revenues will help reduce the budget deficit and more factories will relocate to America to avoid the import taxes and cause trade imbalances to disappear. The wave of tariffs continues to be a source of uncertainty about whether it could lead to higher prices for consumers and businesses if companies simply pass along the costs. The problem was seen sharply on Tuesday after General Motors reported a 35% drop in its net income during the second quarter as it warned that tariffs would hit its business in the months ahead, causing its stock to tumble. As the August 1 deadline for the tariff rates in his letters to world leaders is approaching, Mr Trump also announced a trade framework with the Philippines that would impose a tariff of 19% on its goods, while American-made products would face no import taxes. The president also reaffirmed his 19% tariffs on Indonesia. The US ran a 69.4 billion dollar trade imbalance on goods with Japan last year, according to the Census Bureau. America had a trade imbalance of 17.9 billion dollars with Indonesia and an imbalance of 4.9 billion dollars with the Philippines. Both nations are less affluent than the US and an imbalance means America imports more from those countries than it exports to them. The president is set to impose the broad tariffs listed in his recent letters to other world leaders on August 1, raising questions of whether there will be any breakthrough in talks with the European Union. At a Tuesday dinner, Mr Trump said the EU would be in Washington on Wednesday for trade talks. 'We have Europe coming in tomorrow, the next day,' Mr Trump told guests. The president earlier this month sent a letter threatening the 27 member states in the EU with 30% taxes on their goods to be imposed starting on August 1.
North Wales Chronicle
7 minutes ago
- North Wales Chronicle
Donald Trump announces trade deal with Japan
'This Deal will create Hundreds of Thousands of Jobs – There has never been anything like it,' Mr Trump posted on Truth Social, adding that the United States 'will continue to always have a great relationship with the Country of Japan'. The president said Japan would invest 'at my direction' 550 billion dollars into the US and would 'open' its economy to American cars and rice. The 15% tax on imported Japanese goods is a meaningful drop from the 25% rate that Mr Trump, in a recent letter to Japanese Prime Minister Shigeru Ishiba, said would be levied starting on August 1. Early Wednesday, Mr Ishiba acknowledged the new trade agreement, saying it would benefit both sides and help them work together. With the announcement, Mr Trump is seeking to tout his ability as a dealmaker — even as his tariffs, when initially announced in early April led to a market panic and fears of slower growth that for the moment appear to have subsided. Key details remained unclear from his post, such as whether Japanese-built cars would face a higher 25% tariff that Mr Trump imposed on the sector. But the framework fits a growing pattern for Mr Trump, who is eager to portray the tariffs as a win for the US. His administration says the revenues will help reduce the budget deficit and more factories will relocate to America to avoid the import taxes and cause trade imbalances to disappear. The wave of tariffs continues to be a source of uncertainty about whether it could lead to higher prices for consumers and businesses if companies simply pass along the costs. The problem was seen sharply on Tuesday after General Motors reported a 35% drop in its net income during the second quarter as it warned that tariffs would hit its business in the months ahead, causing its stock to tumble. As the August 1 deadline for the tariff rates in his letters to world leaders is approaching, Mr Trump also announced a trade framework with the Philippines that would impose a tariff of 19% on its goods, while American-made products would face no import taxes. The president also reaffirmed his 19% tariffs on Indonesia. The US ran a 69.4 billion dollar trade imbalance on goods with Japan last year, according to the Census Bureau. America had a trade imbalance of 17.9 billion dollars with Indonesia and an imbalance of 4.9 billion dollars with the Philippines. Both nations are less affluent than the US and an imbalance means America imports more from those countries than it exports to them. The president is set to impose the broad tariffs listed in his recent letters to other world leaders on August 1, raising questions of whether there will be any breakthrough in talks with the European Union. At a Tuesday dinner, Mr Trump said the EU would be in Washington on Wednesday for trade talks. 'We have Europe coming in tomorrow, the next day,' Mr Trump told guests. The president earlier this month sent a letter threatening the 27 member states in the EU with 30% taxes on their goods to be imposed starting on August 1.
