Us Japan Trade Deal: US President Donald Trump reduced tariffs on Japanese autos from 27.5% to 15%. This decision is a big relief for Japan and gives a new direction to the trade agreement between the two countries. Talks on investment and agricultural products have also intensified.

Us Japan Trade Deal: The long-running tariff tussle between the US and Japan has finally turned into an agreement. US President Donald Trump on Thursday signed an executive order to reduce tariffs on Japanese autos and many other products. This step is considered important in the direction of implementing the recently made trade agreement between the two countries. According to the order issued by the White House, Japanese autos will now attract only 15 percent tariff instead of 27.5 percent. The same limit will also apply to many other products.

US Japan Trade Deal: Big relief for Japan

This decision is being seen as a big victory for Japan. Japan's special envoy Ryosei Akazawa had taken the initiative to reach Washington and get Trump to sign the document. Earlier in July, both the countries had announced the agreement, but differences emerged on its details. According to the new order, this maximum limit of 15 percent will be considered effective from August 7. That is, the same rate will be applicable on goods sent from that date. The rule will have to be implemented within seven days of its publication in the Federal Register.

Trump Reduces Tariff On Japanese Cars: The Japanese auto industry was deeply affected

The Trump administration had imposed a separate tariff of 25 percent on Japanese vehicles in early August. Apart from this, the already existing 2.5 percent tariff also continued. In this way, the total duty reached 27.5 percent. This was a big blow for Japan, because its auto sector is linked to about eight percent of the country's jobs. With this agreement, Japan has got the same relief that was earlier given to the European Union. The maximum tariff limit for many products on the EU is also fixed at 15 percent.

New discussion on investment

Trump has claimed that Japan will invest $550 billion in the US. The order also states that the US government will select the investment projects. However, its details were not given in the document. Trump says that the US will keep 90 percent of the profits from this investment, while Japan has clarified that its investment will mostly be in the form of loans and loan guarantees.

Akazawa's visit was earlier delayed as Washington was demanding Japan reduce tariffs on agricultural products. Trump has long been calling on Japan to import more American rice.

PC:Prabhat Khabar