Tokyo and Washington also agreed on a set of provisions related to digital trade, including a prohibition on imposing tariffs on digital products transmitted electronically, including videos, music, e-books, software and games, according to the USTR. The deal ensures barrier-free cross-border data transfers.
In the letter to Congress last week, the Trump administration left open the possibility of doing a comprehensive trade agreement in the future and said it would continue to collaborate with Congress on future negotiations. Mr. Trump on Wednesday said such a deal will be signed in the future.
Business groups welcomed Wednesday’s deal but called on the Trump administration to continue negotiations on the full scope of U.S.-Japan trade issues.
“Today’s news will spur economic growth and boost sales on both sides of the Pacific, especially for American farmers and ranchers and the digital economy,” said Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce.
“However, it’s not enough,” Mr. Brilliant said. “The Chamber strongly urges the administration to hold fast to its commitment to achieve a comprehensive, high-standard trade agreement with Japan that addresses the full range of our trade priorities, including services, intellectual-property protection, and regulatory barriers to trade.”
The president vowed that the deal will help “reduce our chronic trade deficit” with Japan. In 2018, the U.S. exported $75 billion of goods to Japan but imported $142 billion, leading to a trade deficit of $67 billion
For its part, Japan had expected to receive protection from the Trump administration’s threatened tariffs on automobile imports. The Trump administration has determined that such imports threaten U.S. national security and has the authority to impose tariffs on the basis of that finding. The initial U.S. announcement, however, made no mention of any assurances to Japan that it would avoid the tariffs.
A joint statement signed by the two countries, however, offered an indirect assurance that the U.S. wouldn’t hit Japan with auto tariffs, saying the two sides will “refrain from taking measures against the spirit of these agreements.”
The nations made a similar agreement when their talks began a year ago, and the U.S. has since refrained from adding tariffs against Japan. The statement also said “both nations will make efforts for an early solution to other tariff-related issues,” without specifying a timeline.