Sour deal with Japan

Frustration is mounting in Japan after it became clear this week that Tokyo and Washington have different interpretations of a key component of their new trade deal.

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Tensions are running so high here that Prime Minister Shigeru Ishiba, fighting for his political survival after a humiliating electoral defeat last month, had to try to explain the unusual, vague deal his government struck with President Donald Trump on July 23.

“The other party [Trump] is not a normal person,” Ishiba told frustrated lawmakers pressing for more detail in a session at the Japanese parliament this week, asserting that his counterpart doesn’t play by the rules of conventional trade agreements and unilaterally changes the rules.

  WaPo

No shit, Shigeru.

Late last month, the two sides announced they had reached a trade deal but it essentially amounted to a handshake agreement. With no provisions committed to a formal document, the fact sheets that both governments released have conflicting information.

In their announcement, both countries said the United States would impose a 15 percent tariff on goods from Japan. Tokyo said any item already subject to tariffs higher than 15 percent would be exempt from the new taxes. But the executive order Trump signed last week suggested the rate would be applied on top of existing levies, including beef, which faces a 26.4 percent tariff.

Ryosei Akazawa, Japan’s chief trade negotiator, traveled to Washington on Tuesday to try to sort out the discrepancy but just after he landed, the U.S. interpretation was published in the Federal Register. On Thursday, Akazawa announced that the two sides had agreed to Japan’s interpretation. The White House has yet to release a public statement.

So, actually, there is no deal?

“I think Japan, South Korea, and other allied countries feel the same — that even toward strong allies, Trump tariffs are imposed without mercy,” Itsunori Onodera, policy chief for Japan’s ruling Liberal Democratic Party, said in an interview. “This shows how difficult the U.S. is as a country to understand in terms of balancing its security alliance and trade relationships.”

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Another point of contention is the $550 billion investment plan that Japan pledged in exchange for lower tariffs, a hallmark of the deal. Trump this week said the U.S. would be free to use the money to invest as Washington deems fit. “I got a signing bonus from Japan of $550 billion — that’s our money. It’s our money to invest, as we like,” Trump told CNBC. But Ishiba has maintained that the process would be led by Japanese companies and backed by financial institutions affiliated with the Japanese government, which would offer up to $550 billion in equity investments, loans and loan guarantees. The Japanese government does not have the power to compel Japanese companies to invest in the U.S., let alone the Trump administration.