U.S. and Japan announce Trade Agreement

Posted on Sep 27

On September 25, 2019, The White House announced two new agreements on trade with Japan that it expects will reduce the U.S. trade deficit with that country. The Office of the U.S. Trade Representative (USTR) said the two sides plan further negotiations in the coming months in the interest of achieving a more comprehensive agreement that “addresses remaining tariff and non-tariff barriers and achieves fairer, more balanced trade.”

Under a market access agreement , Japan will eliminate or significantly reduce tariffs on $7.2 billion worth of U.S. agricultural products. For some agricultural products, Japan will establish U.S. specific quotas. According to the USTR, once all of this is in place, over 90% of U.S. food and agricultural items will receive duty free or preferential tariff access. The United States will eliminate or reduce tariffs on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018, including products such as certain perennial plants and cut flowers, persimmons, green tea, chewing gum, and soy sauce.

Additionally, the U.S. also agreed to reduce tariffs on certain industrial goods from Japan, including certain machine tools, fasteners, steam turbines, bicycles, bicycle parts, and musical instruments.

The United States and Japan have reached a separate agreement on a high-standard and comprehensive set of provisions addressing priority areas of digital trade.

The USTR has provided a fact sheet that can be found here but has not yet announced when the agreement will become effective.

V. Alexander will continue to monitor the situation and provide updates as they become available. Please contact your V. Alexander account team with any questions.