Japan cancels chief negotiator's US visit over tariff relief delay
What's the story
Japan's chief trade negotiator, Ryosei Akazawa, has canceled his planned visit to the United States. The cancellation comes as a setback in finalizing a $550 billion investment package from Tokyo in exchange for tariff relief. Akazawa was supposed to finalize the terms of this package during his Washington trip.
Agreement specifics
Deal specifics still unclear
In July, Washington and Tokyo had agreed to a reduced 15% tariff on Japanese imports. This was in return for the US-bound investment package through government-backed loans and guarantees. However, the specifics of this deal are still unclear. While Donald Trump has touted the package as "our money to invest," Japanese officials have stressed that investments will be decided based on their benefits to Japan.
Tariff concerns
Japanese officials demand amended presidential executive order first
Japanese officials have repeatedly said they want an amended presidential executive order first to remove overlapping tariffs on Japanese goods. This is before releasing a joint document on the investment details. The US has agreed to revise the July 31 presidential order, ensuring that the 15% levy agreed last month on Japanese imports isn't stacked on goods already subject to higher tariffs, like beef.
Tariff reduction
Japan cuts growth outlook for the year
US officials have also said Trump will issue another order to lower tariffs on Japanese cars from 27.5% to 15%. However, no timeline has been given for this move. Japan's exports saw their biggest monthly drop in four years in July, mainly due to a slump in shipments to the US. Reflecting the tariff damage, Japan cut its growth outlook for the year from 1.2% to 0.7% earlier this month.