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Tokyo Weekender
4 hours ago
- Business
- Tokyo Weekender
Japan and US Agree on ‘Massive' Trade Deal
In a long-anticipated announcement, US President Donald Trump revealed a new trade agreement with Japan on Tuesday, calling it a 'massive' win for both countries. Japanese Prime Minister Shigeru Ishiba confirmed the news the next morning. He welcomed the deal, saying it was 'the lowest figure to date among countries with a surplus with the US.' The deal marks a significant shift in bilateral trade, but not without costs for Japan. While the agreement eases immediate trade tensions, Japan made several high-value concessions in exchange for relatively limited tariff relief. List of Contents: Tariff Relief at a Price Strategic Gains Amid Uneven Terms Related Posts Tariff Relief at a Price At the heart of the deal is a tariff rollback: Japanese carmakers, who had been bracing for 25% duties, will now face a 15% rate. Ishiba described the deal positively, but the reduced tariff still represents a significant burden compared to previous trade terms. In contrast, a recent US-UK agreement set a 10% cap for a limited number of British vehicles. The US made no firm commitments beyond the tariff reduction. Japan, on the other hand, agreed to invest $550 billion into American industries such as AI, semiconductors, shipbuilding and clean energy, designed to deepen bilateral ties but also ease Washington's economic security concerns. Strategic Gains Amid Uneven Terms The deal also includes assurances that Japan will not be treated unfavorably in future US tariffs on sensitive goods, such as pharmaceuticals and advanced technology. On agriculture, Japan also agreed to buy more US rice within its existing 770,000-ton import quota. Japan's chief negotiator, Economic Revitalization Minister Ryosei Akazawa, concluded the final round of talks in Washington this week. 'Mission accomplished,' he posted on X after meeting with US officials. Markets welcomed the news. The Nikkei 225 jumped over 1,300 points , passing the 41,000 mark for the first time in a year, with automakers leading the surge. Despite concerns about fairness, the agreement is Japan's 'best compromise at this stage,' Shigeto Nagai from research firm Oxford Economics told BBC News . Discover Tokyo, Every Week Get the city's best stories, under-the-radar spots and exclusive invites delivered straight to your inbox. By signing up, you agree to our Privacy Policy . Related Posts Shigeru Ishiba Denies Rumors He Will Resign at the End of August Trump Hits Japan and South Korea With 25% Tariffs Sanseito, Explained: The Alarming Rise of Japan's Far-Right Movement
Reuters
6 hours ago
- Business
- Reuters
Breakingviews - Britain's non-dom melodrama has uncertain finale
LONDON, July 23 (Reuters Breakingviews) - Britain is haemorrhaging rich taxpayers, and it is all Rachel Reeves' fault. That's the received wisdom about the finance minister's decision to kill off so-called non-domiciled status, which allowed non-Brits to live in the United Kingdom without paying tax on their overseas income and capital gains. Yet the fiscal upshot of any expat exodus is hard to nail down. So-called non-dom status originated in the 18th century to shield citizens working in the British Empire from taxes back at home. Its modern iteration, which allowed those born overseas to only pay tax on what they earned in the UK or brought into the country, was increasingly hard to defend. After 2008, the government made those holding non-dom status for more than seven years pay a hefty annual charge, while ministers later capped the perk at 15 years from 2017. Prior to losing an election last year, Reeves' Conservative predecessor Jeremy Hunt scrapped the category. So when Reeves confirmed, opens new tab non-dom status was no more last October, it was hardly a surprise. Even so, her reforms had several important nuances. Recent arrivals who have been in Britain for less than four years are still able to swerve taxes on overseas earnings. Until 2028, they can also bring accumulated wealth onshore at a discounted tax rate that starts at 12% and rises to 15%, well below the typical 40%-plus charge. But former non-doms who stayed beyond April 2025 are on the hook for UK inheritance tax on their worldwide assets, also charged at 40%. This can apply for a decade, even if they subsequently move elsewhere and die there. This last provision caused deep consternation among Britain's wealthiest expats. High-profile non-doms like Egyptian billionaire Nassef Sawiris, opens new tab are upping sticks, while an Oxford Economics survey, opens new tab last year predicted over 60% of the group would follow within two years. On paper, this looks like a fiscal own goal for the UK. A cohort of wealthy but highly mobile people who previously paid some UK tax will take their contributions elsewhere. Some have decamped to Italy, which lets new arrivals shelter overseas income for a flat fee of 200,000 euros a year. Yet the reality is more complicated. The consequences for Britain's fiscal position depend on how much UK tax non-doms previously paid; how many quit the country; and how much overseas wealth and income they take with them. The last two figures are hidden inside a black box. Reeves knows how much the non-doms previously contributed to the exchequer. New figures, opens new tab for the tax year ending April 2023 – the last for which there is detailed HM Revenue & Customs (HMRC) disclosure – show people claiming the status paid 7 billion pounds in tax on UK earnings and capital gains. That's how much is at risk if they all decamp. Yet such a universal exodus is implausible. And those who stay will in future pay tax on their worldwide earnings, just like ordinary Brits. Estimating that contribution requires guesswork, because non-doms did not previously have to disclose their offshore wealth. Arun Advani of the University of Warwick hypothesises, opens new tab that the average non-dom's overseas income is similar to the figure rich Britons disclose to the taxman. If he's right, the average non-dom had offshore earnings and gains of 440,000 pounds in 2018. That figure has probably swelled due to inflation and rising asset values. The problem is that there is no such thing as an average non-dom. Of the 42,300 people who used the status to shield offshore wealth, some 17,700 told HMRC that their overseas income and gains were less than 2,000 pounds a year, making them largely irrelevant to the exchequer. Of the remaining 24,600, some are still exempt from offshore tax because they have been in the country for less than four years. HMRC data shows that only 2,600 people paid a fee of 30,000 pounds a year or more to preserve their special status. This group may well have the largest hoard of offshore wealth. It also paid a big chunk of UK tax, accounting for 1.3 billion pounds of the 7-billion-pound domestic non-dom contribution, HMRC data shows. The tax consequences for Reeves, then, boil down to two numbers. How much does the UK tax paid by former non-doms shrink as some of them leave? And does the additional tax on foreign earnings paid by those who remain make up the shortfall? Answering that question involves lots of assumptions. The Centre for Economics and Business Research (CEBR), for example, estimates, opens new tab that the UK government will be worse off if more than a quarter of non-doms leave. By contrast the Office for Budget Responsibility, which monitors UK fiscal matters and has access to foreign governments' data on British taxpayers, reckons, opens new tab Reeves will on average pocket an additional 3.5 billion pounds a year between 2026 and 2030 from taxing former non-doms' overseas earnings and gains. The OBR does not disclose what happens to the domestic tax take, and stresses its figures are 'highly uncertain'. However, it assumes just 12% of non-doms will flee, implying a significant net gain for government coffers. Measuring the scale of the exodus is further complicated by the fact that this cohort is already highly mobile. Last year, for example, 8,900 non-doms left, opens new tab Britain while 12,900 new ones arrived. It's also true that the decisions of a small number of very wealthy people could swing the results one way or another. For Reeves, who expects the new regime and the temporary discount for bringing wealth onshore to raise 34 billion pounds by 2030, any shortfall is bad news, especially now that Labour's botched welfare reforms have left her with big fiscal holes. The Financial Times reported last month that she might limit the damage by tweaking the inheritance tax provisions, which the OBR projects will raise only 500 million pounds over the four years to 2030. Even so, any comprehensive assessment of Reeves' decision will have to wait until January 2027, when tax returns for the year ending April 2026 are due. Before then, any accusation that she has made a major fiscal faux pas is pure guesswork. Follow George Hay on Bluesky, opens new tab and LinkedIn, opens new tab.
Yahoo
12 hours ago
- Automotive
- Yahoo
These are the 3 manufacturing sectors set to be the big winners of Trump's Made in America push
Trump wants to increase manufacturing in the United States. His economic agenda has centered on measures meant to compel companies to build on US soil. These three industries are the likely big winners of the Made In America push, Oxford Economics says. President Donald Trump wants more stuff to be made in America. Upon taking office in January, he implemented tariffs against prominent US trade partners in an effort to bring more manufacturing back to American shores, brushing off warnings of potential pain for companies and consumers. But some industries are likely to see a boost in US manufacturing over others, Oxford Economics said on Tuesday. The firm is predicting that high-tech goods, pharmaceuticals, and aerospace technology will have an advantage. Nico Palesch, a senior economist at the forecasting firm, said these industries are well-positioned to benefit from Trump's policies because they already have a foothold in the US market. "A sector that has significant domestic capacity in the US is much more likely to be able to expand capacity and accrue benefits from changes in tariffs or reductions in taxation because the business case for operating in the US is already strong, as opposed to a sector that would essentially need to be built from the ground up," he stated. Despite high economic uncertainty, Palesch added that Trump's policies are likely to help spur growth for US manufacturing. He also credited the CHIPS and Inflation Reduction Acts of 2022 with helping revitalize US manufacturing in areas such as semiconductors and green technology production. In his view, they will be responsible "for a majority of reindustrialization" in the coming years. Palesch highlighted the advantage that companies with a strong US presence will have, noting that he did not believe Trump's policies would bring back an abundance of manufacturing jobs to the US. "A car maker in the US is more likely to decide to expand an existing production line or set up a new factory to try and capture more market share at the expense of tariffed competition than a firm operating in a sector that has little or no presence in the US," he added. The economist said he sees Boeing as a top pick among aerospace stocks, adding that while the company has experienced some negative publicity of late, "it remains one of the two major international aerospace manufacturers capable of producing the types of aircraft typically used in air travel at scale." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14 hours ago
- Automotive
- Yahoo
These are the 3 manufacturing sectors set to be the big winners of Trump's Made in America push
Trump wants to increase manufacturing in the United States. His economic agenda has centered on measures meant to compel companies to build on US soil. These three industries are the likely big winners of the Made In America push, Oxford Economics says. President Donald Trump wants more stuff to be made in America. Upon taking office in January, he implemented tariffs against prominent US trade partners in an effort to bring more manufacturing back to American shores, brushing off warnings of potential pain for companies and consumers. But some industries are likely to see a boost in US manufacturing over others, Oxford Economics said on Tuesday. The firm is predicting that high-tech goods, pharmaceuticals, and aerospace technology will have an advantage. Nico Palesch, a senior economist at the forecasting firm, said these industries are well-positioned to benefit from Trump's policies because they already have a foothold in the US market. "A sector that has significant domestic capacity in the US is much more likely to be able to expand capacity and accrue benefits from changes in tariffs or reductions in taxation because the business case for operating in the US is already strong, as opposed to a sector that would essentially need to be built from the ground up," he stated. Despite high economic uncertainty, Palesch added that Trump's policies are likely to help spur growth for US manufacturing. He also credited the CHIPS and Inflation Reduction Acts of 2022 with helping revitalize US manufacturing in areas such as semiconductors and green technology production. In his view, they will be responsible "for a majority of reindustrialization" in the coming years. Palesch highlighted the advantage that companies with a strong US presence will have, noting that he did not believe Trump's policies would bring back an abundance of manufacturing jobs to the US. "A car maker in the US is more likely to decide to expand an existing production line or set up a new factory to try and capture more market share at the expense of tariffed competition than a firm operating in a sector that has little or no presence in the US," he added. The economist said he sees Boeing as a top pick among aerospace stocks, adding that while the company has experienced some negative publicity of late, "it remains one of the two major international aerospace manufacturers capable of producing the types of aircraft typically used in air travel at scale." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
16 hours ago
- Automotive
- The Star
Nikkei rally buoys Asian shares as Trump announces Japan trade deal
A woman walks past an electronic board showing the Nikkei 225 index on the Tokyo Stock Exchange in Tokyo on June 17, 2025. (Photo by Kazuhiro NOGI/ AFP) SYDNEY: Japanese shares led an Asian share market rally on Wednesday after U.S. President Donald Trump announced a trade deal with Japan and fuelled hopes of more to come, offsetting mixed U.S. earnings that highlighted the drags from higher tariffs. Trump late on Tuesday announced a trade deal with Tokyo that he said will result in Japan investing $550 billion into the United States and paying a 15% reciprocal tariff. It followed an agreement with the Philippines that will see the U.S. collect a 19% tariff rate on imports from there. "Though details are not yet available, it is commendable that the 25% baseline tariff was avoided," Norihiro Yamaguchi, senior Japan economist at Oxford Economics. "In the short run I think lowered uncertainty will be welcomed in the equity market. But global trade policy uncertainty will remain high, meaning that today's conclusion will provide little upside to the real economy." The U.S. president also said representatives from the European Union are coming for trade negotiations on Wednesday. In another positive development, U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal, Treasury Secretary Scott Bessent said. Japan's Nikkei rose 1.7% on Wednesday as shares of automakers surged. Mazda Motor rallied 12% while Toyota Motor jumped 10%. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2% underpinned by higher openings in Australia and South Korea. The yen initially gained on the news, but was last flat at 146.68 per dollar. Nasdaq futures climbed 0.1% and S&P 500 futures gained 0.2% in Asia. Overnight, Wall Street closed mixed as investors assessed a spate of varied earnings and signs that Trump's trade war is hitting corporate profit margins. General Motors tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results. Investors are now waiting for results from Tesla and Google's parent Alphabet - the Magnificent 7 stocks that have driven much of the market rally fuelled by AI optimism. In the foreign exchange market, the dollar index was flat at 97.45 against its major peers, having slipped 0.4% overnight to mark the third straight day of declines. Benchmark 10-year U.S. Treasury yields ticked up 2 basis points to 4.3579, after slipping 3 bps overnight, as Trump continued to lash out at Federal Reserve Chair Jerome Powell for not cutting interest rates, although Bessent said there was no need for him to step down immediately. Bessent did say the Fed's vital independence on monetary policy is threatened by its "mandate creep" into non-policy areas and he called on the U.S. central bank to conduct an exhaustive review of those operations. Spot gold prices were steady at $3,429 an ounce. - Reuters
