Japan Urges US to Implement 12.5% Tariff Cut on Automobiles

Japan has urged the United States to swiftly implement the agreed-upon measures from their bilateral trade agreement, including the reduction of tariffs on automobiles and automotive parts. The Japanese government, in a statement, revealed that the country's chief trade negotiator had requested the U.S. to expedite the process during a 90-minute meeting with the U.S. Secretary of Commerce in Washington. The agreement stipulates that the U.S. will reduce the comprehensive tariff on Japanese automobile imports from the current 27.5% to 15%. However, the U.S. has yet to specify the effective date for this policy.

The Japanese government has expressed concern over the lack of clarity regarding the implementation timeline and the potential for unequal treatment compared to the European Union. The U.S. has granted the EU a "no stacking" tax treatment, which means that a single item will not be subject to multiple layers of tariffs. However, Japan has not received the same assurance, leading to uncertainty and frustration.

The Japanese government has emphasized the importance of a written agreement to ensure transparency and reliability. The chief trade negotiator has stated that while verbal assurances are helpful, they are not sufficient for a country that values written agreements. The negotiator also clarified that the 5500 billion investment promised by Japan to the U.S. will primarily be in the form of low-risk loans and guarantees, with only a small percentage being direct equity investments. This investment is intended to support the development of critical supply chains related to national security.

The Japanese government has dispatched its chief trade negotiator to the U.S. for a five-day visit to push for the implementation of the tariff reduction agreement. This is the ninth visit by the negotiator to the U.S. for this purpose. Despite the ongoing efforts, the U.S. has not provided a written response confirming that Japan will receive the same tax treatment as the EU, nor has it specified the exact start date for the tariff reduction.

The Japanese government has also highlighted the need for a clear and consistent approach to tariff reductions. The chief trade negotiator has reiterated the importance of ensuring that automobiles and related parts that have already been taxed at a rate exceeding 15% will not be subject to additional tariffs. The Japanese government is committed to working with the U.S. to resolve these issues and ensure a fair and equitable trade agreement.