U.S.-Japan Trade Agreement – Limited Deal Reached With More To Come

On September 25, the United States and Japan reached an initial trade deal to lower certain tariff barriers between the two trading partners. This initial agreement improves market access for certain agricultural and industrial goods and, according to the President, will open markets to approximately $7 billion in U.S. agricultural products. The Fact Sheet released by the U.S. Trade Representative’s office stated that once the agreement is implemented over 90 percent of U.S. imports food and agricultural products into Japan will be duty free or have preferential tariff access. In particular, Japan agreed to lower tariffs on U.S. imports of beef and pork, to provide a country-specific quota for U.S. wheat and wheat products, and to eliminate immediately tariffs on, among other products, almonds, walnuts, blueberries, cranberries, sweet corn, grain sorghum, and broccoli. Reciprocally, the United States will reduce or eliminate tariffs on certain Japanese industrial goods including certain machine tools, fasteners, steam turbines, bicycles, bicycle parts, and musical instruments.

Digital trade has been another area of focus in the U.S.-Japan trade negotiations. In this initial deal, the two countries have agreed not to impose customs duties on digital products transmitted electronically such as videos, music, e-books, software, and games, and to ensure non-discriminatory treatment for digital products. The deal will also lower trade barriers for data transfers.

Although there was no specific mention of how the deal would impact the President’s past comments on imposing tariffs on imports of Japanese cars under Section 232 of the Trade Expansion Act of 1962, the joint statement provided that neither country will impose any further tariffs that would go against the spirit of the agreement.

In 2018, Japan was the United States’ fourth largest trading partner. Trade negotiations for a bilateral agreement between the two nations began back in April of 2019. The joint statement released by the United States and Japan stated that the two countries are aiming to complete trade talks in the next four months.