Japan-US trade agreement: Tokyo to import ‘very beautiful’ Ford F-150s; duties on Japanese car exports still unclear

Japan is set to begin importing Ford’s hefty F-150 pickup trucks, US President Donald Trump said on Tuesday, even as questions linger over the full scope of the countries’ trade agreement.The move comes as part of a deal announced in July, under which Japanese imports will be hit with a 15% “reciprocal” tariff, lower than the 25% previously threatened. The new rate is due to take effect from Thursday, in line with changes affecting several other countries.In exchange, Tokyo has agreed to lift “restrictions” on American cars entering Japan, including a key concession to recognise US vehicle safety standards.“They’re taking our cars,” Trump told CNBC in a phone interview. “They’re taking the very beautiful Ford F-150, which does very well. And I’m sure we’ll do very well there, and other things that do very well here will also do well there.”While Japanese carmakers export millions of vehicles to the US each year, American cars are a rare sight on Japanese roads. Ford pulled out of the Japanese market nearly ten years ago, citing weak sales, as reported by AFP.The F-150, which is 2.4 metres (96 inches) wide with mirrors, is considered too large for Japan’s narrow roads, and American models often come with steering wheels on the left-hand side, opposite to Japanese driving norms.Despite the headline agreement, several aspects of the trade deal remain unclear. A major sticking point is when the US will reduce its own tariffs on Japanese cars. Currently, these stand at 27.5%, made up of a long-standing 2.5% levy plus an additional 25% introduced under Trump. That figure is meant to drop to 15%, though a timeline has yet to be confirmed.There is also uncertainity on whether other levies on Japan will be capped at 15%, or if this would come on top of existing ones. A recent US executive order suggested that the upper limit would apply solely to the European Union, not Japan.On Tuesday, Japan’s tariffs envoy Ryosei Akazawa departed for Washington on what marks his ninth trip in ongoing trade talks.“One purpose of my visit is to prompt the issuance of the president’s executive order regarding tariffs on autos and auto parts as early as possible,” Akazawa said before leaving.“I have confirmed with the United States that there are no discrepancies (regarding the reciprocal tariff rates), but keeping in mind the new duties will be implemented on Thursday, I would like to provide a reminder for a thorough response beforehand,” local media quoted him as saying.Adding to the confusion, Trump claimed that Japan would be investing $550 billion into the US economy, with America retaining 90% of the profits.“That’s like a signing bonus that a baseball player would get,” he told CNBC. “That’s our money. It’s our money to invest as we like.”However, Japanese officials have indicated the sum will mainly comprise loans and loan guarantees, rather than direct investment.