US-Japan trade talks start today

Today marks the start of planned meetings between US Trade Rep Lighthizer and Japan’s Economy Minister Motegi
We’re not expecting to much out of these straight away but who knows what comments may hit.. The US wants a victory, of course, and Japan just wants to avoid new tariff on autos. Steel is not that big an issue but will be part of. There may be some tug of war over bilateral and TPP in the mix.
Overall both are close allies and important trading partners but Trump hasn’t been very gentle to Japan in trade comments nor how he’s handling North-Korea, pushing Abe to the side. It may get interesting.
Japan’s already building cars in the US, upped their military equipment purchases from US and promised more investments. Maybe they can buy more space equipment? Still Japan imports cars and parts into the US. A 25% tariff would increase costs dramatically, putting heavy pressure on Japanese profits.
Total costs for Japan’s industry could be close to 10 Bln USD.
US would of course like to sell more cars in Japan. There are no tariffs on these, just really tough rules making it expensive to run dealerships of foreign carmakers in Japan.
Side-note: US charges 25% import tax on light trucks, who said a tax free world? OH yes, the US …

Expect some moves in JPY late night or tomorrow depending on how both sides react, keeping the positions to “small summer size” in the meantime

Latest posts by K-man (see all)

Pin It on Pinterest