U.S. and Japan Trade Deal ends as Japanese Government looks for Guarantees on Auto Taxes

Auto Taxes

United States and Japan’s trade deal has hit an obstacle in its last stages as executives from the Japanese government has tried to find guarantees from the Trump government, to not charge national-security based taxes on cars and auto parts made in Japan.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe have been anticipating to sign a trade deal, when they are set up to meet at the United Nations General Assembly in New York. The deal is produced to strengthen the access of U.S. agricultural products into Japanese markets in also to combined reductions in taxes on industrial products.

The trade deal is limited, and won’t have any effect on taxes and trade rules that are important to the vehicle industry, which is the biggest contributor to the huge USD 67.6 billion trade deficiency between the two nations.

President Trump has avoided from reacting on his threat of charging a 25 percent tax on Japanese and European goods of auto parts and vehicles, which he has ascribed to the ongoing trade bargaining with these nations.

Sunset Clause to Cause Contention

The representative for the Japanese Foreign Ministry, Masato Ohtaka,  said that Japan was still confident to sign the contract with the United States before the month’s end, and that there was time to clear out the problems: “Frankly speaking, we still have some time and all my colleagues in the government are making their best efforts to actually meet this target.”

The key point of disagreement in the deal is that Japan has been requesting the inclusion of a sunset clause in the deal, which could enable Japan to stop trade advantages for the US, if President Trump were to charge taxes on Japanese cars and parts.

Aware of the details of the deal, Japan has showed concerns about making into a trade deal without guarantees that President Trump would keep away from charging Japanese cars products as he gets advantages from agricultural advantages from the Japanese.