Donald Trump backtracked on Japan, reduced tariff from 25 to 15 percent

New Delhi. US President Donald Trump on Thursday signed an executive order implementing the new US-Japan trade agreements. He described it as the beginning of a ‘new era of US-Japan trade relations’.

In this order, a baseline tariff of 15 percent has been imposed on almost all Japanese imports coming to the US, while sector-specific exemptions have been given to automobiles and auto parts, aerospace products, generic medicines and natural resources not available domestically.

Let us tell you that initially the Trump administration had announced to impose a 25 percent tariff on Japan and South Korea. In the middle, talks between the US and Japan on the trade deal were also stuck. Now finally the Trump administration has approved the imposition of a 15 percent baseline tariff on Japan.

“Under this agreement, the United States will impose a baseline tariff of 15 percent on nearly all Japanese imports into the United States,” the White House statement said. It also states that this framework is based on the principles of reciprocity and our shared national interests.”

One of the most distinctive features of this agreement is Japan’s promise to invest $ 550 billion in the US, which the order describes as ‘unlike any other agreement in American history’. The White House said that these investments will create jobs, expand manufacturing and strengthen national security.

Under this agreement, Japan has also committed to buy US-made commercial aircraft, defense equipment and billions of dollars worth of agricultural products including rice, corn, soybeans, fertilizer and bioethanol. Tokyo has agreed to increase its rice imports by 75 percent under the Minimum Access Plan, which will bring US agricultural exports to Japan to about $ 8 billion per year.

The order says that this agreement provides a level playing field for American products, takes into account US national security needs, expands US exports and investment-based production, and helps reduce the trade deficit with Japan.

Japanese negotiator Akazawa Ryosei was in Washington this week for another round of talks while the executive order was being signed.