US industries and protectionists are expressing concerns over former President Donald Trump’s agreement with Japan, arguing it could undermine his stated objectives of rebalancing America’s trading relationships and revitalising domestic manufacturing. Trump and his lead negotiators previously touted the deal as a potential model for other nations seeking tariff concessions, highlighting Japan’s commitment to establish a $US550 billion fund for US investments.
The decision to grant Japan relief on automobiles has drawn criticism, with concerns raised that the agreement fails to address the primary source of the US’s trade deficit with Japan, while simultaneously disadvantaging Detroit’s Big Three automakers. Approximately 80 per cent of the trade imbalance between the US and Japan is attributed to cars and car parts.
This announcement signals a willingness to negotiate on industry-specific duties on products, including chips and pharmaceuticals. This shift potentially undermines the most durable aspect of Trump’s tariff strategy. The reaction highlights the inherent risks associated with the president’s transactional negotiating style.
Industries that have largely supported Trump’s trade strategy and stand to gain from significant levies on foreign competitors could find themselves at a disadvantage as his plans evolve. Matt Blunt, president of the American Automotive Policy Council, representing Ford, General Motors, and Stellantis, stated that “Any deal that charges a lower tariff for Japanese imports with virtually no US content than it does North American built vehicles with high US content is a bad deal for the US industry and US autoworkers.”
