There was a problem in an investment agreement negotiated by Japan with the Trump administration.
Japan’s top trade negotiator canceled a trip to the U.S. on Thursday, aiming to finalize Tokyo agrees to invest $550 billion in exchange for smaller U.S. tariffs On its exit.
Ryosei Akazawa will fly to the U.S. to make written confirmation of commitments in the investment agreement, such as the ROI allocation between the two countries, a source previously told Reuters.
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U.S. Commerce Secretary Howard Lutnick also said news about Japanese investment will be announced this week.
But the Japanese seem to be worried about the hasty nature of the deal and how President Trump explains it. They hope to confirm in writing that the U.S. tariffs on automobiles and auto parts will be reduced from 25% to 15% before finalization.
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“It was found that during the coordination with the United States, some views need to be discussed at the administrative level. Therefore, the trip has been cancelled,” Japanese government spokesman Yoshimasa Hayashi told reporters on Thursday.
Washington and Tokyo agreed in July to reduce tariffs on Japanese imports by 15% in exchange for government-backed loans and guarantees in exchange for U.S.-restricted investments, but details of their content are unclear.
Although Trump touted the plan as “the money we want to invest” and said the United States will retain 90% of its profits, Japanese officials stressed that it will be based on whether they will benefit Japan as well.
Japanese officials have repeatedly said they would rather make amended presidential executive orders to remove overlapping tariffs on Japanese goods before publishing joint documents on investment details.
The U.S. has agreed to amend its July 31 presidential order to ensure a 15% tax on Japanese imports last month without stacking on beef (such as beef) that impose higher tariffs.
Japan’s exports fell sharply
U.S. officials also said Trump will issue another order to reduce tariffs on Japanese cars from 27.5% to 15%, but does not specify when.
“We strongly demand that measures be taken to amend the Presidential Order to tariffs on each other as soon as possible and issue the Presidential Order to reduce tariffs on auto parts,” Hayashi added.
Japan’s exports reported the biggest monthly decline in July for four years, driven by a decline in U.S. transportation volumes. Reflecting tariff losses, Japan lowered its annual growth outlook from 1.2% to 0.7% earlier this month.
Akkasha can travel to Washington early next week after resolving the issue, a government source familiar with the negotiations said.
- Jim Pollard’s Extra Input and Editing by Reuters
