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Trump’s letter to US congress reveals that US strikes trade agreement with Japan

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US President Donald Trump

US President Donald Trump last evening said that Washington had hit trade alliance with Japan which could come into effect without fraternity approval but fell short to convince Tokyo that new tariffs will not be imposed on crucial auto exports.

A letter addressed to the US congress was released by the White House in which Trump expressed his intent to admit to the agreements regarding tariff hurdles and digital trade over the next few weeks and informed lawmakers that the tariff agreement will be signed under a provision of trade law that would allow the US President to implement the corresponding tariff cut down by  decree.

The letter also mentioned a statement by Trump that read, “ In addition, I will also enter into an Executive Agreement with Tokyo based on digital trade.”

On the other hand, Trump’s statement has left Japan uncertain if Trump has given a nod to not slap national security tariffs on Japanese vehicles and auto parts which would ignore Section 232 but tariffs of up to 25% would act as a key motivator for Japan in trade negotiations with the US.

Japan’s foreign minister ToshimitsuMotegiat a press conference in Tokyo said, “ Towards the finishing touch we intend to reaffirm that Section 232 will not be imposed.”

Whereas the Finance minister of Japan said that the agreement won’t include any provision regarding currencies which happens to be another worrisome issue for Japan. Japan wants to keep away from any deal that might become a hurdle in its capability to interfere in the foreign exchange markets or enlargement of Bank of Japan’s large monetary boost.

Trump and Abe at the recent G7 summit held in France said that they were optimistic towards signing a deal at the United Nations General Assembly in New York this month.

Though Trump in his letter didn’t reveal any of the contents in the agreement but Japan had earlier said it was open to taking into consideration a deal that would cut down agricultural tariffs to limits that were earlier observed in the Trans-Pacific Partnership, a trade deal that Trump had exited on the very third day after holding office as the President in 2017. The letter also mentioned that the US would seek further trade negotiations with Japan. It read, “ My Administration looks forward to continuing collaborating with the Congress on future negotiations with Japan to attain an extensive trade agreement that brings about fair and corresponding trade between both countries.”

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