Japan, US near deal to bring lower auto tariffs into effect: source
A reduced tariff rate on Japanese cars, from the current 27.5 to 15%, is set to take effect by the end of this month
[TOKYO] Japan and the United States are in the final stages of talks to implement lower tariffs on Japanese automobile imports within 10-14 days after the issuance of a US presidential executive order, a Japanese government source told Reuters on Thursday (Sep 4).
That means that a reduced US tariff rate on Japanese cars, from the current 27.5 to 15 per cent, is set to take effect by the end of this month, said the source, who declined to be identified as the matter is confidential.
The exact date to be specified in the executive order is still under discussion, the source said, adding that the final decision would rest with US President Donald Trump.
The US embassy in Tokyo did not immediately respond to a request for comment. The Japanese government declined to comment.
The US in July agreed to lower tariffs on imports of Japanese automobiles but the timing remains unclear as Trump has yet to sign an executive order.
Japan’s top trade negotiator Ryosei Akazawa flew to Washington on Thursday to press the US over issuing the executive order.
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The executive order is also expected to include provisions that the 15 per cent levy agreed in July would not be stacked on Japanese imports that are subject to higher tariffs, while items previously subject to less than 15 per cent tariffs would be adjusted to 15 per cent, the source said.
The two governments are working to include in the executive order some context on the tariff deal, including Japan’s plans to expand US rice imports and purchases of US-made aircraft, according to the source.
A joint statement outlining the July agreement and a memorandum clarifying rules for Japan’s planned US$550 billion US-bound investment package are also expected to be issued alongside the executive order.
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The investment package, which will come in the form of equity, loans and guarantees from Japan’s government-owned banks, was agreed as part of the July trade deal.
“The talks are now in their final phase,” the source said. “Once Minister Akazawa arrives in Washington, the aim is to have the executive order issued swiftly. We will then move on to formulating plans to execute investment projects,” he said. REUTERS
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