President Trump recently traveled to France for the G7 summit, which took place on August 24 and 25. The G7 is an international meeting of seven countries, including France, Germany, Italy, Canada, Japan, the United Kingdom and the Unites States.
During the final day of the G7, President Donald Trump and Japanese Prime Minister Shinzo Abe announced to reporters that they had reached a trade agreement. The deal will concentrate on agriculture (farming), industry, and digital trade. Under the deal, Japan is expected to buy $7 billion of US agricultural products – this is “very good news” for American farmers and ranchers.
Japan will import more corn, wheat, pork, dairy, beef, and wine; corn is important for Japan right now because of a pest problem that impacts its domestic products. In exchange, the US will cut tariffs (import taxes) on most Japanese industrial products. For now, Tokyo and Washington have agreed to “core principles,” but the next step is putting it on paper.
“We have been working on a deal with Japan for a long time. It involves agriculture. It involves e-commerce. It involves many things. We’ve agreed in principle,” Trump said. “We’ve agreed to every point, and now we’re papering it and we’ll be signing it at a formal ceremony.”
The leaders told the press that they expect to sign officially in September.
The US-Japan agreement appeared to have come out of left field. Most observers had anticipated a drawn-out trade negotiation.
The unhappy wheat industry tweeted immediately after his remarks:
“Mr. President, Japan is the #1 market for US wheat exports on average. They don’t buy our wheat because ‘they want us to feel okay.’ They buy it because it’s the highest quality wheat in the world. That’s not fake news.”
Meanwhile, the Japanese leadership had made it clear from the first day of talks that Tokyo would be tough negotiators. With economic problems in Japan, Abe unexpectedly acted to remove any uncertainty over the situation. However, the prime minister is not out of the woods yet. Any trade development needs to be approved by the Japanese parliament.