What does this mean for the auto industry?
Tensions may be rising in the discussion between the US and Japan on automotive imports. We have seen President Trump's stance that there should be more American cars on the roads in Japan. Japan's answer to this demand is that the US should simply "build better cars," because American cars are seen as thirsty and unreliable in Japan. We have also seen President Trump publicly criticize automakers like Nissan and Toyota on Twitter for wanting to open new factories in Mexico. It seems like the two countries are far from an agreement.
Automotive News reports that Japan has rejected US demands for more access to Japan's car market. The talks are currently being conducted by Japan's Deputy Prime Minister Taro Aso and U.S. Vice President Mike Pence. "We do not impose import tariffs on cars, and we do not impose any non-tariff barriers," Chief Cabinet Secretary Yoshihide Suga told the press. "Our position is that Japan's auto market is already open. This is something that will be settled in our bilateral dialogue." Suga's statement came after the US claimed that "a variety of non-tariff barriers impede access to Japan's automotive market." As all car guy's know, the US-Japan automotive market is far from "fully open."
These talks on automotive trade also include taxes on agricultural products. The US says that Japan's agricultural sector is protected by "substantial barriers." Japan already agreed to lower tariffs on beef and pork in the Trans-Pacific Partnership, a deal that President Trump withdrew from in one of his earliest acts as president. The TPP could have really opened up trade between the US and Japan and even put and end to the ridiculous 25-year import ban. Japan relies heavily on its automotive sector, so if the US imposes tariffs on imports, it could cripple the Japanese economy. We will continue to report on this issue as the trade talks develop.