Japan is set to begin importing Ford's hefty F-150 pickup trucks, as announced by US President Donald Trump on Tuesday, amidst lingering uncertainties surrounding the full extent of the trade agreement.
The move follows a deal revealed in July, where Japanese imports will face a 15% "reciprocal" tariff, lower than the previously threatened 25%. This new rate is scheduled to come into effect on Thursday, aligning with changes impacting several other nations.
In return, Tokyo has agreed to remove "restrictions" on American cars entering Japan, including a significant concession to acknowledge US vehicle safety standards.
"They're taking our cars," Trump stated in a phone interview with CNBC. "They're taking the very beautiful Ford F-150, which performs excellently. I believe we will also succeed there, and other successful products here will likewise thrive there."
Although Japanese automakers export millions of vehicles to the US annually, American cars are uncommon on Japanese roads. Ford exited the Japanese market almost a decade ago, citing poor sales.
The F-150, measuring 2.4 meters (96 inches) in width with mirrors, is considered too large for Japan's narrow roads, often featuring left-hand drive models contrary to Japanese driving norms.
Despite the headline agreement, many aspects of the trade deal remain unclear. An unresolved issue is the timeline for the US to reduce its tariffs on Japanese cars, currently at 27.5%, comprised of a longstanding 2.5% levy and an additional 25% introduced under the Trump administration.
There is also ambiguity regarding whether other levies on Japan will be capped at 15%, or if they would be in addition to existing ones. A recent US executive order implied that the maximum limit would only apply to the European Union, not Japan.
On Tuesday, Japan's tariffs envoy Ryosei Akazawa departed for Washington for what marks his ninth trip in ongoing trade discussions.
"One purpose of my visit is to urge the issuance of the president's executive order on tariffs concerning autos and auto parts as soon as possible," Akazawa mentioned before his departure.
"I have verified with the United States that there are no discrepancies regarding the reciprocal tariff rates, but with the new duties set to be enforced on Thursday, I aim to prompt a comprehensive response beforehand," he was quoted by local media.
Adding to the confusion, Trump claimed that Japan would invest $550 billion in the US economy, with America retaining 90% of the profits.
"That's like a signing bonus that a baseball player would receive," he expressed to CNBC. "That's our money. It's our money to invest as we see fit."
However, Japanese officials have indicated that the bulk of the sum will mainly consist of loans and loan guarantees, rather than direct investment.
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