Japan Pushes for US Trade Deal, Urges Against Auto Tariffs

Japanese officials are calling on the Trump administration not to impose tariffs on car imports from the island nation, citing on-going trade talks, as well as the possible negative consequences for both the American and Japanese economies.

Kristian Rouz — A group of Japanese lobbyists for the island nation's car industry is urging US President Donald Trump not to impose auto tariffs on bilateral trade, saying an 'appropriate decision' is more desirable amid the on-going trade talks.

According to a statement from the Japan Automobile Manufacturers Association, made-in-Japan cars don't pose a threat to US national security, domestic production or employment. Japanese industry experts suggested cars imported from Japan don't constitute direct competition to US-made cars, while auto tariffs could also affect the production of auto parts in the US.

"We look forward to President Trump's understanding and a careful and appropriate decision on his part regarding this matter of critical importance to the U.S. automobile industry and the American people," Akio Toyoda, the Association's chairman, said.

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The group's statement comes in response to a Commerce Department report to the Trump administration, in which officials expressed concern regarding the high level of auto imports from Japan. The department suggested steep tariffs targeting Japanese cars could help level the playing field for US carmakers, and save many American jobs.

Japan, however, expressed hope a mutual understanding could be reached with the Trump administration during the on-going negotiations on trade. The nation's Economy Minister Toshimitsu Motegi, who also leads Japan's negotiating team with the US, said the US should abstain from introducing tariffs or any trade restrictions while trade talks are underway.

Motegi said he has reached an understanding on the matter with US Trade Representative Robert Lighthizer, while Prime Minister Shinzo Abe also said existing tariffs on the bilateral flow of various goods would remain unchanged for the duration of the talks.

Trump has said before that undesirable or dangerous imports could face US tariffs of up to 25 percent — which doesn't necessarily mean such imports would end or significantly drop, but Japanese cars would become more expensive for US buyers.

This, in turn, could reduce the demand for Japanese vehicles in the US, as consumers would opt for US-made analogues.

For their part, economists at the Daiwa Institute of Research said auto tariffs are a matter 'of life or death' for the Japanese economy, as it is heavily reliant on exports of manufactured goods — particularly, cars, and, particularly, to the US.

But the Japan Automobile Manufacturers Association's Toyoda believes the US would also suffer negative consequences from the possible tariffs, should they be put in place.

"Introducing import restriction measures would not only negatively affect our US customers, but would also disrupt the operations of US vehicle and auto parts manufacturers as well as auto dealerships," Toyoda stressed.

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Negotiating teams from Japan and the US are set to hold consultations in April and May, according to reports. The sides are expected to achieve a sweeping trade deal, which could possibly allow Japan to maintain its current levels of car exports to the US — in exchange for imports of US goods, ranging from agricultural products to cars.