The US and Japan have signed a new trade agreement for the agriculture and digital sectors. The US could soon be exporting additional $ 7 billion worth of additional products such as beef, corn, wheat, and wine to Japan, thanks to lower or abolished tariffs, said US President Donald Trump at the signing of the agreement in New York. This is a "big win" for US farmers, Trump said.
Japan's Prime Minister Shinzo Abe called the agreement beneficial for both sides. Trump said "huge progress has been made in the digital economy too. Both sides also agreed not to impose tariffs on electronic products such as software, e-books, games and music. Trump said the agreement would significantly lower the US trade deficit with Japan.
However, the agreements concluded after around six months of negotiations do not regulate all trade relations. An agreement that would include the important automotive sector, for example, does not yet exist. The US government has threatened Japan with high punitive tariffs on car imports.
The trade volume of the two states amounted in 2018 according to US data to about 300 billion US dollars. Japan was the fourth largest trading partner for the US. However, the trade deficit amounted to nearly $ 70 billion in 2018.
With exports worth $ 13 billion, in 2018 Japan was also the third largest export market for American agricultural products. The US imported $ 143 billion worth of goods from Japan, including automobiles, machinery and electrical appliances.
Trump instigated a trade war with China more than a year ago. This conflict is slowing growth in both countries and worldwide. The EU is also threatening Trump with new punitive tariffs.