According to the reporting, all Japanese exports to the US will only be tariffed at 15%, including cars and steel. Meanwhile, big three products from Mexico and Canada are tariffed at 25%, with higher rates threatened.
Steve
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Trump does not understand how things interconnect. He simply sees each deal as a deal on its own. He does not understand or even care how a deal with Japan can impact anything else. Like Detroit.
He is running Detroit into the ground and either cannot understand why, or even care.
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Here is an interesting additional tidbit:
“Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits,” Trump wrote in the post.
So Japan will be required to invest half a Trillion, only where his nibs says to invest it? That sounds like it’s on the ragged edge of a bribe, as the money can be directed to benefit himself and his cronies.
Steve
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Don’t forget the half a trillion to be spent by Softbank. Building infrastructure is expensive and a multiyear proposition. But that’s the goal.
Oh, and the CHIPS act included spending $300 billion.
DB2
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What I’m pointing my finger at is “himself” says he will be directing the investments, not business principles, or the parties putting up the money.
Steve
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The big three are crying a river about being thrown under the bus.
Welcome to the new Shiny-land, where a half trillion bribe moves the needle, a lot more than nationalism.
Steve
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It has become increasingly clear that trade partners have adapted to Donald’s style and aren’t actually going to provide the benefits that Donald announces. It’s all about the headline. When one digs further into the details, one finds that the headline omits quite a bit. For example, Donald has been obsessed with further opening the Japanese rice market to U.S. exports. Japan appears to have agreed to do so in this “deal” but in truth, the Japanese government will decide how much to allow in and use various metrics to do so, including the type and quality of rice. U.S. companies generally do not grow the type of the rice popular in Japan. So very little rice is likely to be imported under this agreement. Of course, Donald and his minions don’t understand this and probably aren’t interested anyway.
That said, assuming that the sector tariffs hold- particularly steel, aluminum and copper- U.S. industry will face significant price hikes and competitive pressures. Meanwhile, consumer price inflation for automobiles continues to rise.
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“himself” is bragging about the non-tariff barriers to US built cars being eliminated. But they drive on the left in Japan. Will the requirement that cars be right hand drive be eliminated for US build cars? If so, who will buy left hand drive cars, in Japan, anyway?
Steve
That’s why I’ve developed the habit of reading reporting from the countries we’re negotiating with.
"Japan and the United States will make efforts to strengthen supply chains through Japanese investment in the U.S., with a focus on semiconductors, pharmaceuticals, steel, shipbuilding, critical minerals, aerospace, energy, automobiles, artificial intelligence and quantum technology.
Japanese government-affiliated financial institutions will provide up to $550 billion in equity investments, loans and loan guarantees, Akazawa said."
No doubt a lot of this investment will go to Japanese companies operating in the US. Claiming the US will reap 90% of the profits from these investments is just plain silly.
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Japan is suffering through a rice shortage, so they need to import it from somewhere. The price of rice in Japan has doubled.
Why Japan is running low on rice
https://www3.nhk.or.jp/nhkworld/en/news/backstories/3553/
DB2
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I don’t blame them. This deal is a big FO to the American auto industry.
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Japan is indeed suffering from a rice shortage, exacerbated by hoarding. They may yet end up importing more, though that’s a fraught political issue in Japan. However, if one looks to see what Japanese officials are saying:
" Under a World Trade Organization (WTO) “minimum access” framework introduced in 1995, Japan imports about 770,000 metric tons of rice tariff-free every year. Last fiscal year, the U.S. accounted for 45% of the total.
“We made absolutely no sacrifice in the agricultural sector,” Ishiba told reporters.
“Import volumes will remain within the minimum access framework and we retain the discretion over how much and what type (of rice) to import from each country,” he said."
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Or…how we’re chasing Japan into the arms of another.
The US is quickly becoming a second-rate ally and partner across the world. Diplomacy? Defense? Trade? Intelligence sharing? Humanitarianism? Say sayonara to US leadership.
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