Latest news with #trade deficit
Japan Times
2 days ago
- Automotive
- Japan Times
Who buys the F-150s, and more Japan deal mysteries
The long-awaited trade deal between the U.S. and Japan has investors celebrating after months of uncertainty. But as the song goes, nagging questions always remain. Who is going to buy the "cars, SUVs and trucks' that U.S. President Donald Trump has promised to sell? Who is going to purchase the 100 Boeing jets? And what possible structure could the $550 billion fund, allegedly financed by Tokyo with 90% of profits going to U.S., actually take? Answers are sorely needed, not just because of an already growing comprehension gap between the countries over what was actually agreed, but to inform South Korea, the European Union and other close U.S. allies who are trying to wrap up similar deals before Aug. 1. Let's start with autos, long the main source of Trump's dissatisfaction with Tokyo, as well as the largest single cause of the trade deficit. The White House fact sheet (if indeed it can so be called) declared that "long-standing restrictions on U.S. cars and trucks will be lifted, granting U.S. automakers access to the Japanese consumer market.' Of course, U.S. carmakers have enjoyed unlimited access to the Japanese market for decades. As I noted in April, the problem is that U.S. cars just aren't good enough for the local consumer — and Detroit largely isn't interested in trying to muscle its way into a hyper-competitive market dominated by domestic players. Tokyo can try making it a little easier to import U.S. vehicles, such as simplifying inspection procedures. But it can't rebuild cities to fit the bloated models U.S. automakers favor. Around 84% of streets in Japan are municipal roads with an average width of just 3.7 meters (about 12 feet). Even if Tokyo gave everyone a Ford F-150 pickup, its 2.4-meter width would prevent two from passing on narrow streets. Hence cute minivans and kei-cars dominate while, as my colleague Liam Denning said this week, "U.S. automakers do not, in general, make an adorable little anything.' In any case, Japan's auto market has been shrinking for years, with new cars sold down about 20% from a 1990s peak. Automakers constantly fret that young people are losing interest in learning to drive, while the growing numbers of elderly citizens are encouraged to return their licenses. But more significant is what form the $550 billion investment fund will take. Treasury Secretary Scott Bessent said that the "innovative financing mechanism' was the key to Tokyo getting a deal at all. But neither side seems to agree on what it looks like. The idea first surfaced in May when the Financial Times reported that SoftBank Group founder Masayoshi Son had suggested a joint sovereign wealth fund. The White House calls it an "investment vehicle' that will "rebuild and expand core American industries.' Prime Minister Shigeru Ishiba, however, refers to a combination of equity, loans and guarantees that will be led by the Japan Bank for International Cooperation and guarantees by Nippon Export and Investment Insurance. That sounds more like overseas development aid than a wealth fund — though few could argue American infrastructure might actually benefit from that. Trump now promises Japan will "give us 90% of $550 billion!' Tokyo is saying that applies to projects where 90% of investment is from the U.S. — in other words, profits are proportional. Does the figure include funding already pledged, such as SoftBank's promised $100 billion? Who knows?! Indeed, a leaked photo from the talks shows what looks like a proposal from Japan for a $400 billion fund, crossed out with $500 billion handwritten on top. That proposal also suggested a 50% profit share. Is this just repackaged existing spending into a simple PowerPoint slide? After all, Japan already invested $783 billion in the U.S. in 2023 and Ishiba pledged in January to boost that to $1 trillion in the future. The problem is that at some stage, this needs to be worked into actual policies. And this is where Ishiba's rush to agreement might come back to bite, especially if he's no longer in the job when the talks get down to details — something that, despite his denials, still seems all but certain after the drubbing his Liberal Democratic Party took in recent Upper House elections. There are plenty of parts of the deal that do make sense. The 100 Boeings can find a home at the country's airlines, though Japan has admitted the number includes at least some already-planned purchases. As the world's largest buyer of liquid natural gas, Tokyo's participation in the Alaska project always seemed logical. Even if the two sides don't seem to agree on what they decided on defense, Japan needs to spend more and the U.S. is the logical seller. Above all, it's encouraging to see the White House, after all these months of tense relations, again describe its ally as the "cornerstone of peace in the Indo-Pacific.' But with all these questions — and Washington continuing to hold the threat over Japan's head with a quarterly evaluation of its compliance with the deal — the market's sigh of relief might still be premature. Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas.
Emirates 24/7
3 days ago
- Business
- Emirates 24/7
Trump announces trade deal with European Union
US President Donald Trump has announced a trade agreement between the United States and the European Union that includes a 15 percent tariff on most imports from EU countries. Speaking during a meeting with European Commission President Ursula von der Leyen in Scotland, Trump said the agreement followed intensive negotiations and aims to reduce the US trade deficit and establish a more balanced economic relationship between the two sides. He noted that the US trade deficit with the EU reached US$235.6 billion in 2024. The president revealed that pharmaceutical products would be exempt from the new tariffs, along with limited exclusions for aircraft and medical equipment. Trump added that the tariff rate, initially expected to reach 30 percent, was reduced to 15 percent under the new agreement, which is set to take effect in August. Von der Leyen expressed the EU's satisfaction with the agreement, describing it as a balanced outcome for both parties. She also stated the EU's intention to increase purchases of US military equipment as part of the bilateral understanding, while remaining prepared to introduce precautionary trade measures if necessary. Follow Emirates 24|7 on Google News.
The Sun
3 days ago
- Business
- The Sun
US and EU agree landmark trade deal after months of talks, Donald Trump says
The US and EU have agreed on a trade deal, says US President Donald Trump. Trump announced the deal as he hosted EU chief Ursula von der Leyen at one of his golf resorts in Scotland. 1 "We have reached a deal. It's a good deal for everybody," Trump said. "It's going to bring us closer together... it's a partnership in a sense," he added. Meanwhile, von der Leyen hailed it as a "huge deal", which came after "tough negotiations". The US and EU have longed enjoyed one of the world's largest trade relationships. Total trade in goods between the EU and US totalled around $975.9bn (£751.4bn) in 2024, estimates say. The US imported about $606bn (£451bn) worth of goods from the EU and exported around $370bn (£276bn) last year. Trump has said this trade deficit means the US is "losing".
South China Morning Post
5 days ago
- Business
- South China Morning Post
South Africa pushes to increase trade exports to China amid US' 30% tariff hike
Facing a US tariff of 30 per cent from August 1, South Africa is intensifying efforts to significantly grow its exports to China and address a persistent trade imbalance. Advertisement A high-level delegation, led by Deputy President Paul Mashatile, has been on a week-long visit to Beijing, seeking investments and pitching strategic opportunities to diversify the nation's export basket beyond basic commodities towards higher-value products such as pharmaceuticals, automotive goods and green energy technologies In a speech at the South Africa China Investment Forum, held on the sidelines of the third China International Supply Chain Expo (CISCE) in Beijing earlier this week, Mashatile said South Africa's trade deficit with China had risen from less than US$1 billion (7.2 billion yuan) annually between 1988 and 2000 to US$9.71 billion (69.7 billion yuan) by 2023. 'We need to address challenges such as access to the Chinese market due to factors like tariff and non-tariff barriers, distance and competition from other countries,' he said. South Africa is seeing a growing trade deficit that heavily favours China, and Mashatile explained that tackling these challenges required expanding South Africa's export portfolio, encouraging value-added exports and establishing a more balanced trade relationship. Advertisement
Free Malaysia Today
7 days ago
- Business
- Free Malaysia Today
Trump sets 19% tariff on Indonesian goods in latest deal, EU readies retaliation
Donald Trump announced that Indonesia agreed to buy US$19.5 billion in US goods and an order for 50 Boeing jets, with no timeline set. (AP pic) WASHINGTON : President Donald Trump on Tuesday said the US would impose a 19% tariff on goods from Indonesia under a new agreement with the Southeast Asian country and more deals were in the works as he continued to press for what he views as better terms with trading partners and ways to shrink a huge US trade deficit. The pact with the relatively minor US trading partner is among the handful struck so far by the Trump administration ahead of an Aug 1 deadline for tariffs on most US imports to rise again. The accord came as the top US trading partner – the European Union – readied retaliatory measures should talks with Washington fail. As that deadline approached, negotiations were under way with other nations eager to avoid more US levies beyond a baseline 10% on most goods that has been in place since April. Trump's roll-out of the policies has often been chaotic. His moves have upended decades of negotiated reductions in global trade barriers and roiled international financial markets and economic activity along the way. Based on Trump tariff announcements through Sunday, Yale Budget Lab estimated the US effective average tariff rates will rise to 20.6% from between 2% and 3% before Trump's return to the White House in January. Consumption shifts would bring the rate down to 19.7%, but it's still the highest since 1933. Trump outlined an Indonesia deal similar to a pact struck recently with Vietnam, with a flat tariff on exports to the US roughly double the current 10% and no levies on US exports going there. It also included a penalty rate for so-called transhipments of goods from China via Indonesia and a commitment to buy some US goods. 'They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,' Trump said outside the Oval Office. Trump later announced on his Truth Social platform that Indonesia had agreed to buy US$15 billion of USenergy products, US$4.5 billion of American farm products and 50 Boeing jets, though no time frame was specified. Trump: India talks moving the same way Indonesia's total trade with the US – totalling just under US$40 billion in 2024 – does not rank in the top 15, but it has been growing. US exports to Indonesia rose 3.7% last year, while imports from there were up 4.8%, leaving the US with a goods trade deficit of nearly US$18 billion. The top US import categories from Indonesia, according to US Census Bureau data from the International Trade Centre's TradeMap tool, last year were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp. Susiwijono Moegiarso, a senior official with Indonesia's coordinating ministry for economic affairs, told Reuters in a text message: 'We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.' Trump had threatened the country with a 32% tariff rate starting Aug 1 in a letter sent to its president last week. He sent similar letters to about two dozen trading partners this month, including Canada, Japan and Brazil, laying out tariff rates ranging from 20% to 50%, plus a 50% tariff on copper. Speaking in Pittsburgh on Tuesday, Trump said he favoured blanket tariffs over complicated negotiations, but his treasury secretary Scott Bessent and commerce secretary Howard Lutnick were keen to land more trade agreements. Upon his arrival back in Washington, Trump told reporters that letters would be going out soon for many smaller countries, suggesting they would face a tariff of 'a little over 10%.' The Aug 1 deadline gives targeted countries time to negotiate about lower tariff rates. Some economists have also noted Trump's pattern of backing off his tariff threats. Since launching his tariff policy, Trump has clinched only a few deals, falling short of earlier promises to land '90 deals in 90 days.' So far, framework agreements have been reached with the UK and Vietnam, and an interim deal has been struck with China to forestall the steepest of Trump's tariffs while negotiations continue between Washington and Beijing. Trump said talks with India were moving 'along that same line,' adding, 'We're going to have access to India. And you have to understand, we had no access into any of these countries. Our people couldn't go in. And now we're getting access because of what we're doing with the tariffs.' EU readies retaliation The breakthrough with Indonesia came as the European Commission, which oversees trade for the EU, prepared to target €72 billion (US$84.1 billion) worth of US goods – from Boeing aircraft and bourbon whiskey to cars – for possible tariffs if trade talks with Washington fail. Trump is threatening a 30% tariff on imports from the EU from August 1, a level European officials say is unacceptable and would end normal trade between two of the world's largest markets. The list, sent to EU member states and seen by Reuters on Tuesday, pre-dated Trump's move over the weekend to ramp up pressure on the 27-nation bloc and responded instead to US duties on cars and car parts and a 10% baseline tariff. The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products – a range of fruits and vegetables, along with wine, beer and spirits – valued at €6.35 billion.
