US president Donald Trump has signed an executive order to reduce the tariff rate on automobiles and auto parts imported from Japan to a total of 15pc, as agreed in the bilateral trade deal between Japan and the US in July
The 15pc tariff rate is lower than the current total rate of 27.5pc, which includes an additional tariff rate of 25pc. It will be effective within seven days of the publication in the Federal Register, the White House said on 4 September.
It will come into effect within two weeks at the latest, said Japan's economic revitalisation minister Ryosei Akazawa, who was a negotiator during the trade talks between the US and Japan.
Japan, which counts its automobile segment as a core industrial sector, has been asking the US to implement the lower tariff rate on automobiles since the trade deal between the two countries in July.
The Japanese government is also working to accept US-manufactured and US safety-certified passenger vehicles without additional testing, for sale in Japan, the latest executive order said.
The latest executive order will implement a mitigation measure on the reciprocal tariff. The latest reciprocal tariff imposed on imports from Japan will be 15pc, inclusive of other existing tariffs. It will not be applied to items with an existing tariff rate of 15pc or higher. This mitigation measure will be effective dating back to 7 August.
"Aircraft and aircraft parts are not subject to reciprocal tariffs or sectoral tariffs" under the latest executive order, Akazawa said.
Japan will purchase US-made commercial aircraft, as well as US defence equipment, the executive order said. The US-Japan trade deal in July included an agreement, under which Japan will purchase 100 Boeing aircraft, according to the White House fact sheet.
Japan will also raise purchases of rice and buy $8bn/yr of US agricultural goods, such as corn, soybeans, fertilizers, and bioethanol, the executive order said.
Japan and the US also signed a memorandum of understanding on Japan's potential investment of $550bn to the US, which was agreed in the trade deal in July. Japan "will provide investments, loans, and loan guarantees with a threshold of $550bn", Akazawa said.
