Japan-U.S. Trade Deal: Three Factors Complicate An FTA

As President Trump prepares his push for a bilateral trade agreement with Japan, the path forward is complicated by at least three factors, despite his apparent warm relationship with Premier and golf partner Shinzo Abe.

First, Japanese vehicle imports are at their highest level in more than a decade.

Second, since President Trump pulled the United States out of the Trans-Pacific Partnership within days of laying claim to the Oval Office in 2017 — a 12-nation agreement that included both the United States and Japan — the other 11 nations have bullied on.

Third, Japan has subsequently concluded a trade pact with the European Union.

While the intent of the TPP was to at isolate China, ironically its successor might now be isolating the United States instead, calling into question the efficacy of Trump’s stated preference for bilateral rather than multilateral trade deals.

First, motor vehicle imports.

Through February, the latest data currently available, U.S. imports from Japan of motor vehicles totaled $6.58 billion. That’s the highest total since the first two months of 2008, when the total reached $8.16 billion. Before the year was over, of course, the U.S. and eventually the world economy were headed into a tailspin, helping doom Republican chances to keep the White House and helping elect a one-term Democratic senator from Illinois by the same of Barrack Obama.

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