The United States and Japan ended a commercial deal in what President Trump calls a “huge” victory, according to what it said. Reuters. As part of the agreement, reports will indicate that Japan will invest $ 550 billion in the United States over the next few years, as the United States is ready to receive “90 percent of profits”, according to President Trump.
The joint agreement also reduces the definitions of Japan from 25 percent of the proposal to only 15 percent, as Japanese Prime Minister Shigro Ishiba confirmed. Low definitions will directly affect the import of agricultural products such as rice, but most importantly, cars and trucks.
In response to the new deal, the largest car manufacturer in Japan has seen huge day gains in the stock market. Honda and Nissan increased by 8 percent, Toyota jumped by 11 percent, Mitsubishi improved by 13 percent, and Mazda’s shares saw the largest increase, climbing by up to 17 percent.
The question is: How will this deal exactly affect the advanced American auto industry?
Great for Trump, good for Japan – Detroit?
Photo by: Getty Images
On the surface, at least, the proposed agreement appears useful for both sides – with the United States getting a slight edge.
If we believe in President Trump’s social participation, the United States will obtain “90 percent” of profits from Japan’s $ 550 billion investments. The president added that this would create “hundreds of thousands of jobs” in this process.
However, many details remain mysterious at the present time. We will likely know more details over the year.
Last year, car exports to the United States from Japan reached 28.3 percent of all shipments. This number fell to 24.7 percent in May, and rose to 26.7 percent in June.
In total, Japan exported $ 70.34 billion (10.3 trillion) of goods to the United States between January and June, which was a slight decrease of 0.8 percent compared to the previous year.
However, not everyone is happy with the proposed deal, according to CNBC. The head of the American Automobile Policy Council (AAPC), Matt Blant – who represents Ford, General Motors, and Stelantis – stated a statement saying:
“Any deal that receives a lesser tariff for Japanese imports with almost no American content of the tariff imposed on the vehicles created in North America with high content in the United States is a bad deal for workers in the United States and workers in the United States.”
Ford and Granur Motors and Stelantis have manufacturing factories in Canada and/or Mexico. President Trump has already suggested 35 and 30 percent of the customs tariff of imports from those countries that start on August 1. This means that manufacturers import production parts in the United States will theoretically witness higher costs.
AAPC issued a similar statement earlier this year after Trump negotiated a 10 percent tariff on imports from the United Kingdom, saying: “This hurts American auto, suppliers and car workers.”
Some car manufacturers already feel pressure from the definitions. General Motors recently announced $ 1.1 billion beatingThe company expects this number to increase to the third quarter. Meanwhile, Stelantis announced Loss of 352 million dollars (300 euros) Because of the customs tariff, the imposition of cuts in manufacturing and charging.
With the deadline on August 1 to loom the tariff negotiations on the horizon, President Trump says negotiations with other markets are still ongoing.
