Uniqlo hopes for breathing room under US-Vietnam tariff deal
TAKESHI SHIRAISHI
TOKYO -- The tariff reductions announced by the U.S. and Vietnam are expected to provide relief for companies like casualwear retailer Uniqlo, which depends on the Southeast Asian nation for a large portion of its supply chain.
U.S. President Donald Trump said Wednesday that U.S. imports from Vietnam will face a 20% tariff, down from the 46% originally proposed. The Vietnamese side did not say what level of tariffs had been agreed on.
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Japan Times
7 hours ago
- Japan Times
As trade deadline approaches, Japan must draw lines
According to conventional wisdom, a strong national leader will force a weak one, or one with less popular support, to buckle in tough negotiations. By that logic, U.S. President Donald Trump has the whip hand in trade talks with Prime Minister Shigeru Ishiba. Yet, Ishiba has held out, resisting U.S. pressure to sign a quick deal, a position that is strengthened, ironically, by Ishiba's weakness. The prime minister cannot afford to make concessions as the July 20 Upper House election approaches. His spine is stiffened by the failure of the U.S. to make clear its demands and the U.S. president's record of ripping up deals that even he negotiated. Clarity and trust are the essential prerequisites of successful negotiations. Neither exists today. Japan was worried about Trump's return to the White House, fearful that the bilateral relationship would suffer given the 45th and 47th president's long-time animus toward Japan and the absence of a 'Trump whisperer,' former Prime Minister Shinzo Abe. Yet, in January, Trump described the partnership as 'a friendship like few others,' certain that 'the cherished alliances between our two countries will continue to flourish long into the future!' Sensing opportunity, Ishiba hurried to Washington to meet Trump, a move that some considered unseemly and perhaps unwise, but the resulting summit was a success. When Trump announced that he would impose blanket 10% tariffs on all trade partners, with still greater sanctions on specific sectors like autos, auto parts, steel and aluminum, Japan was one of the first countries to begin negotiations on a deal, its faith in the relationship yielding confidence that an agreement was possible. Since then, Ryosei Akazawa, Japan's chief tariff negotiator, has visited Washington regularly, sometimes weekly, in search of a deal. Despite seven rounds of talks, periodic claims that an agreement was imminent and impressive efforts by Japan to court the mercurial U.S. president — at one point, Akazawa wore a 'Make America Great Again' cap while meeting Trump — the two countries remain at loggerheads. In the last round, held late last month, Akazawa failed to even meet Scott Bessent, U.S. treasury secretary and chief U.S. negotiator, or U.S. Trade Representative Jamieson Greer. Worse, when the talks adjourned Trump unloaded on Japan, complaining that the country was 'spoiled' and took no U.S. rice or automobiles. Talking to reporters, he wasn't sure if a deal with Japan was possible, saying 'I doubt it. ... They're very tough.' Trump said that he would be sending Japan 'a letter,' or notice of his intent to impose tariffs on its goods, which would mark 'the end of the trade deal.' In an interview, Trump warned that Japan would 'pay a 25% tariff on your cars,' and later comments hinted it could be as high as a 35% levy. Japan responded with silence. While the current deadline for a deal is July 9, Bessent has indicated that an extension might be possible. There are reports that Akazawa may make yet another trip to Washington for another round of talks. One of the questions he needs answered is what purpose U.S. tariffs serve. If they are intended to raise revenue that facilitates the restructuring of the U.S. tax system, which would imply that they are permanent, then the parameters of a deal are much changed. An agreement is difficult when one side doesn't understand the facts. The charge that Japan imports no U.S. rice is false, as agriculture minister Shinjiro Koizumi explained. 'Rice imports from abroad, including from the U.S., had increased 120 times from a year earlier.' If Japanese consumers don't buy U.S. automobiles, it isn't because of tariffs — this country imposes no levy on imported passenger cars — but because American automakers don't build vehicles that Japanese want. Koizumi was right to call Trump's comments an 'obvious misunderstanding of the facts.' Autos are central to any eventual resolution of this dispute. Trump insists that his 25% tariff, imposed in March, is nonnegotiable. Japan wants it gone. The U.S. may believe that Japan will be squeezed by its tariffs. And, in fact, exports to the U.S. dropped by 11% year on year in May, with automobile exports down 24.7%. Automakers have been working to avoid passing on the tariff costs, but they are reaching the limits at which they can squeeze their supply chains. Japanese automakers have increased production in the U.S., which is one of Trump's objectives. Any eventual resolution is more likely to reflect larger political and economic considerations than the specific terms of any document. Fearful of some of the consequences, Trump has been criticized for failing to follow through on his threats and the prospect of an economic slowdown in the U.S. — the perpetual warning of economists when they evaluate his trade policy — could force him to back off again. Trump has also been promising deals for so long and has achieved such meager results — only agreements with Vietnam and the U.K., while a purported pact with China remains unclear — that his administration might settle for something with Japan that is more symbolic than real. If Trump believed that Ishiba would readily submit to his demands, he was mistaken. That error is understandable. The U.S. is central to Japan's economy and critical to its security but the leverage that affords the U.S. president is limited. Growing numbers of Japanese voters oppose gross concessions. One poll shows more than half of voters believe Japan should not make a deal even if it hurts the bilateral relationship. Only 15% agree to concessions to avoid additional tariffs. Most worrisome now is a growing sense among the Japanese public that the U.S. is no longer a reliable partner. After all, in 2019, Trump and Abe released a joint statement after signing a trade pact that said 'While faithfully implementing these agreements, both nations will refrain from taking measures against the spirit of these agreements and this Joint Statement.' Yet here we are again. American credibility is also diminished by constant calls for ever-more defense spending, first to 2% of gross domestic product, then 3% and now 5%. It is not surprising, then, that another recent poll showed that only 22% either greatly (3%) or somewhat (19%) trust the U.S., while 68% somewhat (46%) or entirely (22%) distrust it. An agreement is difficult in these circumstances. Still, it is possible. And Japan has cards to play. It could pledge to increase purchases of crude oil, natural gas and agricultural products to help balance trade accounts. While these are ultimately private sector decisions, the Japanese government could also encourage companies to invest in the U.S. This shouldn't take much effort since it is already occurring. But Japan must also draw lines. While this country needs a good working relationship with the U.S., it must not be at any cost. This country has national interests to protect. They include a thriving security partnership, a stable and growing economy and a rules-based international order. Indulging a mercurial if not arbitrary U.S. president is not among them, especially if it threatens those other concerns. The Japan Times Editorial Board
Nikkei Asia
9 hours ago
- Nikkei Asia
India and US inch closer to interim trade deal ahead of Trump's deadline
A mobile crane carries a container at Deendayal Port in the western state of Gujarat on April 5. India and the U.S. plan to expand the value of bilateral trade to $500 billion by 2030, up from the current $200 billion. © Reuters KIRAN SHARMA NEW DELHI -- India and the U.S. appear on the verge of concluding an interim trade deal ahead of President Donald Trump's Wednesday deadline, when Indian goods would start facing 26% "reciprocal" tariffs, as the sides push toward a comprehensive agreement that could be finalized later this year. The development could help India avoid a steep tariff escalation. It follows a U.S.-Vietnam deal announced on Wednesday in which the U.S. will impose 20% tariffs on Vietnamese goods, lower than the previously threatened 46%.
The Mainichi
10 hours ago
- The Mainichi
Tokyo stocks end flat amid caution over Japan-US tariff talks
TOKYO (Kyodo) -- Tokyo stocks ended flat Friday, capped by caution over the outlook for Japan-U.S. tariff talks after President Donald Trump said his administration may soon start sending letters detailing new unilateral tariff rates. The 225-issue Nikkei Stock Average ended up 24.98 points, or 0.06 percent, from Thursday at 39,810.88. The broader Topix index finished 1.04 points, or 0.04 percent, lower at 2,827.95. On the top-tier Prime Market, gainers were led by electric power and gas and bank issues, while marine transportation and nonferrous metal shares were main decliners. The U.S. dollar fell to the lower 144 yen zone on selling, after briefly approaching the 145 yen line, as speculation over an imminent Federal Reserve rate cut eased following the release of stronger-than-expected jobs data, dealers said. The Nikkei stock index briefly topped the 40,000 mark in the morning, lifted by buying of heavyweight semiconductor issues that tracked gains in their U.S. counterparts following reports that Washington had lifted export curbs on chip design software to China. However, the market later swung between positive and negative territory, pressured by Trump's remarks that about 10 letters could be sent daily starting as early as Friday, with a 90-day pause on so-called reciprocal tariffs set to expire Wednesday. "Investors were cautious ahead of any potential developments later Friday or in the coming days that could move the market," said Asuka Sakamoto, senior economist at Mizuho Research & Technologies Ltd.
