Trump’s ‘Deal’ With Japan Is Another Loser for Americans
The Trump administration is touting a “massive” trade deal with Japan that was struck just days before the (still uncertain) August 1 deadline when higher tariffs are set to hit.
But, as with earlier “deals” struck with the United Kingdom and Vietnam, this agreement looks like a bad one for the United States. Not only does it raise taxes on American consumers, but it leaves American automakers at a distinct disadvantage relative to their Japanese competitors.
Under the terms outlined by Trump in a Truth Social post on Tuesday, imports from Japan will be subject to a 15 percent tariff when they enter the United States. Yes, that’s lower than the 25 percent tariff that the president has been threatening to impose on Japanese imports, but it is still a huge tax increase relative to existing tariffs on Japanese goods.
Previously, the average tariff rate on American imports of Japanese goods was less than 2 percent, according to the World Bank’s data. In other words, Trump’s “deal” amounts to roughly a 650 percent tax increase on those imports. Those taxes, like all tariffs, will be paid by Americans.
The higher tariffs on imports from Japan will hit a wide variety of products, because Japan is one of America’s biggest trading partners. Americans imported over $148 billion of goods from Japan last year, including billions of dollars worth of cars, machinery, industrial equipment, electronics, and pharmaceuticals. Trump’s new deal will make all of those items more expensive.
Because cars are America’s biggest import from Japan, that part of the deal is worth a bit more scrutiny. Indeed, when this deal is combined with some of Trump’s other trade policy
Article from Reason.com
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