Business / Economy

Japan worried Trump will take hard line on bilateral trade if deal with China eludes

JIJI

Japan is wary of the possibility that U.S. President Donald Trump’s administration will adopt a hard line in bilateral trade talks following its tariff hike on Chinese products Friday.

The hike has intensified the uncertainty over the future course of U.S.-China trade discussions, raising concern the United States may rush to produce results in its trade negotiations with Japan, which began in April.

Worries are also mounting that the U.S.-China trade war will affect the Japanese economy. The Japanese government is closely watching related developments, officials said.

Trump voiced his dissatisfaction at his country’s trade deficit with Japan during a summit with Prime Minister Shinzo Abe in late April.

But Trump did not make a difficult request, such as for agricultural market liberalization exceeding the level Japan is committed to under the Trans-Pacific Partnership free trade pact. Trump pulled the U.S. from the TPP talks in early 2017.

According to sources with access to the summit, Trump also did not bring up numerical limits on Japanese vehicle exports to the United States.

His main concern for now is the 2020 presidential race. If the trade negotiations with China reach a dead end, he may attempt a breakthrough with Japan to seek immediate results.

Abe and Trump are expected to hold summits in May and June. Some government officials are braced for the possibility of erratic remarks coming from Trump around the period.

What Tokyo hopes to avoid are additional U.S. duties on Japan-made vehicles that may be introduced on U.S. national security grounds.

The two sides confirmed that no such measure will be taken while the bilateral trade talks are under way, according to sources with access to the negotiations.

But Deloitte Tohmatsu Consulting LLC partner Keisuke Hanyuda, an expert on trade negotiations, warned, “The United States may press for major concessions in the agricultural sector by threatening to impose the additional tariffs.”

Meanwhile, the Chinese economy has slowed down since summer last year, mainly due to the effects of the trade conflict with the United States.

The trade stagnation has spread to other parts of Asia, weighing on Japan’s Asian-bound exports.

“No country benefits from exchanges of trade restrictions,” Finance Minister Taro Aso told a news conference Friday.