EXCLUSIVE: U.S. aims to keep wider range of tariffs with Japan

June 10, 2019

Tokyo--The United States aims to keep tariffs on a wider range of industrial products by changing the definition of automotive parts in trade negotiations with Japan, Jiji Press learned Monday.

This adds to headaches for Japan, which demands that Washington abolish or reduce its tariffs in the category of vehicles and auto parts, if it wants Tokyo to expand market access for U.S. agricultural products, informed sources said.

The two countries will hold a working-level meeting in Washington for two days from Tuesday to scrutinize their effective tariff rates and import volumes. The gathering will be followed by a ministerial meeting Thursday.

In the bilateral trade negotiations since April, the United States says that items also used by many manufacturers outside the auto sector, such as aircraft makers, should be regarded as auto parts, included in the category Washington is sensitive about, the sources said.

The list has far more items than over 60 types of auto parts that Japan considers to be included in the sensitive category. The U.S. refuses unconditional tariff abolitions for the products on the list, the sources said.

In their summit in September last year, Prime Minister Shinzo Abe and U.S. President Donald Trump agreed to give consideration to Japanese treatment of agricultural, forestry and fishery products, as well as to the U.S. auto industry and its job growth, in the bilateral trade negotiations.

Japan believes that if the United States abolishes its tariffs on such auto parts as engines and rearview mirrors, U.S. automakers would see their production costs drop and enjoy business and job growth, the sources said.

But Washington is considering additional tariffs on Japanese vehicles and auto parts, seeing that an increase in such imports would pose a threat to its national security, the sources added.

In the past negotiations on the Trans-Pacific Partnership multilateral free trade agreement, the United States agreed to remove its tariffs on more than 80 pct of auto parts.

The country withdrew from the TPP framework soon after Trump took office in January 2017, while Japan remains a TPP member. Jiji Press