Japanese foreign minister optimistic about bilateral talks with the U.S.; automakers concerned over tariffs

Ahead of a key bilateral meeting between the U.S. and Japan, Japanese foreign minister Toshimitsu Motegi said trade talks will bring peace mind for the automakers and farmers. Motegi is likely to meet U.S. Trade Representative Robert Lighthizer ahead of a summit between President Donald Trump and Prime Minister Shinzo Abe to discuss trade relations between both the countries.

Trump and Abe are expected to secure a deal on farm tariffs and digital trade when they meet in New York this week. They have not divulged full details on the trade talks. The discussion is also likely to cover issues related to auto export.

Motegi said that he would insist on a written assurance that Trump would not impose tariffs on auto exports from Japan to the U.S..

However, the final results of this week’s talks will depend on Trump’s final approval. Japanese sources who are aware of the developments said there is uncertainty in the market regarding the final prospect of the deal.

Japan has a trade surplus with the U.S. and about two-thirds of Japan's export to the U.S. is contributed by automobile. Already Japanese automakers are struggling with the slowing international auto market and any prospective tariffs by the U.S. will further worsen the market.

In the same way as the metal sector, especially steel and aluminium; Trump has also targeted the auto industry, particularly German automakers. He is looking at boosting domestic production and manufacturing with his restrictive trade policies. Top international automakers are also getting affected in the sideline of the U.S., China trade war, as Beijing is getting ready to reinstate higher duties on U.S.-made vehicles from December.