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Trump, Abe sign Limited Trade Agreement Cutting Tariffs on Autos

The U.S. Republican President Trump and Japanese PM Shinzo Abe signed a limited trade agreement on Wednesday that pares tariffs on U.S. farm goods, Japanese machine tools, and different products while further staving off the specter of higher U.S. automobile taxes.

Trump stated the first-phase agreement would open up Japanese marketplaces to about $7 billion worth of U.S. imports yearly, cutting Japanese duties on American consumer goods beef, pork wheat, and cheese.

Although the agreement does not cowl trade in autos, Abe stated he had received reassurance from Trump that the U.S. wouldn’t impose previously threatened “Section 232” national safety tariffs on Japanese automotive imports.

U.S. Trade Executive Robert Lighthizer said after a signing event between the two leaders on the interests of the United Nations General Assembly that the two nations would tackle cars in a later round of talks anticipated to start in April 2020.

Autos are the most significant source of the $67 billion U.S. trade agreement, and Trump has frequently complained that U.S. auto companies don’t enjoy equal access to Japan’s marketplace.

Lighthizer said it was not the U.S.A.’s aim to impose further automotive tariffs, which would be based on the outcomes of a Commerce Division study that has discovered auto imports to threaten national security.

Japanese Foreign Minister Toshimitsu Motegi, who had mediated the agreement with Lighthizer, said that as long as the deal was faithfully implemented, the tariffs wouldn’t be applied.

A Japanese government assertion further read next round of talks would seek to eliminate the existing 2.5% U.S. duty on Japanese vehicles and wouldn’t result in the imposition of U.S. import shares on Japanese autos.

Wednesday’s agreement was met with cautious praise from farm teams and legislators, who said they seek a complete deal.