Japanese Prime Minister Shinzo Abe said there were reasons for poor sales of American cars in Japan, pushing back after US leader Donald Trump described the trade imbalance on vehicles as “unfair.”
His comments yesterday in parliament signalled that automobiles would be a contentious issue in any bilateral trade negotiations. They came a week after Trump contrasted healthy Japanese car exports to the US with the almost non-existent sales of American cars in Japan. The two leaders agreed on Saturday to meet in Washington on February 10 to discuss security and trade issues. Asked in parliament if Japan was doing anything to prevent the entry of US cars, both Abe and his trade minister, Hiroshige Seko, pointed out there are no tariffs on American vehicles.
“It’s not only President Trump, but US officials at all levels often bring this up,” Abe said. “I tell them, if you go outside, you will realise that there are quite a lot of European cars, but no American cars and there are reasons for that. There are no dealers, they don’t exhibit at the Tokyo Motor Show and they don’t advertise on the television or in newspapers.”
“Makers from some countries make an effort by switching the steering wheel to the other side,” he said. “If there is a misunderstanding about this, I will of course explain it to the US side.”
In 2015, Japan exported 1.6mn cars to the US, while fewer than 19,000 American cars were sold in Japan. Seko said the situation was the result of competition.
In his talks next month with Trump, Abe must consider whether, or how, to placate the new US administration, something Japan has done at other times since World World II to maintain healthy ties with its main security ally. Hemmed in by a pacifist constitution and a non-nuclear pledge, Japan relies on the US to provide a “nuclear umbrella” to protect it from regional threats, including its neighbour China. The Japanese leader has signalled he’s open to a bilateral trade deal after Trump formally withdrew from a 12-nation Asia-Pacific accord last week in one of his first acts as president. One-on-one talks with the US on trade are “not absolutely impossible,” Abe told lawmakers last week in Tokyo.
Any such talks could find a sticking point over cars. In 2013, then-Ford Motor chief executive officer Alan Mulally called Japan “the most closed market in the world.” Toyota Motor Corp, which was criticised by Trump over its plans to build a plant in Mexico, has announced it will invest $600mn and add 400 jobs at an assembly plant in Indiana.
Japan PM to meet with Toyota chief executive this week
Japanese Prime Minister Shinzo Abe plans to meet the head of Toyota Motor Corp this week, two sources familiar with the matter told Reuters, as Tokyo scrambles to respond to rising US pressure on trade under new president, Donald Trump.
One of the sources said Abe would meet with Toyota chief executive Akio Toyoda on Friday. Kyodo News agency said they were likely to discuss trade issues involving automobiles, as Abe prepares to meet Trump on February 10 for talks at which the US leader is expected to seek quick progress towards a two-way trade deal with Japan.
In a phone call with Abe on Saturday, Trump reiterated his initiative to create jobs in the United States and asked that the Japanese auto industry contribute, the Nikkei business daily reported, quoting unidentified Japanese government officials.
The two leaders discussed the automotive industry, senior government spokesman Koichi Hagiuda told reporters after the phone call, without giving details.
A White House statement said the two “committed to deepen the bilateral trade and investment relationship.”
Abe has left open the door to discussing a free trade agreement (FTA) with the United States but some officials worry Japan would have little to gain while coming under intense pressure from Washington.
Bilateral talks on specific sectors such as autos, however, are an option, officials have said. Trump, who last week dropped out of the multilateral Trans-Pacific Partnership pushed by his predecessor Barack Obama and favoured by Abe, has also attacked Japan’s auto market as closed in an echo of criticism heard decades ago.
Japanese officials have rejected that criticism, saying Japan does not impose tariffs on US auto imports nor put up discriminatory non-tariff barriers.
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