U.S., Japan reaffirm trade deal despite leadership change

On the Dash:

• The U.S. and Japan agreed to continue implementing their trade deal as Japan transitions to new leadership.
• The agreement cuts U.S. tariffs on Japanese cars to 15% and includes a $550 billion investment fund that has yet to launch.
• Incoming Japanese leader Sanae Takaichi supports the deal for now but remains open to future adjustments that better serve Japan’s interests.

The United States and Japan reaffirmed their commitment to carrying out their bilateral trade deal as Japan transitions to new leadership and prepares for an expected visit from U.S. President Donald Trump later this month.

U.S. Commerce Secretary Howard Lutnick and Japan’s chief negotiator Ryosei Akazawa spoke by phone for about an hour Friday, agreeing to move forward with the implementation of the July agreement and to strengthen the economic partnership between the two nations, according to Japan’s Cabinet Secretariat.

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Under the deal, U.S. tariffs on Japanese cars have been reduced from 27.5% to 15%, and most other Japanese goods are now subject to the same rate. However, a $550 billion Japanese investment fund tied to the agreement has yet to be established. Japan also secured a provision ensuring it will not face higher future tariffs than other countries in key industries such as semiconductors and pharmaceuticals.

The reaffirmation comes as Japan’s ruling Liberal Democratic Party elected Sanae Takaichi to succeed outgoing Prime Minister Shigeru Ishiba. Akazawa, a close ally of Ishiba, is expected to step down from his role in trade negotiations. During her campaign, Takaichi signaled that she does not plan to revise the trade deal immediately but may seek changes during implementation if certain provisions fail to align with Japan’s national interests.

Trump’s upcoming visit to Tokyo is expected to focus on reviewing progress on the trade deal and on broader economic cooperation. Japanese media have reported that the government is considering adopting Ford’s F-150 pickup trucks for official use under the new tariff arrangement. Meanwhile, U.S. officials have expressed interest in Japan increasing purchases of American rice and automobiles.