Japan uneasy over Trump pressure on auto as summit, trade talks loom

TOKYO: Japanese Prime Minister Shinzo Abe will meet US President Donald Trump next week as fears grow in Tokyo that Washington could demand that Japan curb its car exports to the United States.

Japan is hoping to avert any import curbs and potentially steeper US import tariffs on its cars, and fend off US demands for a bilateral free trade agreement (FTA).

Abe and Trump will hold a summit meeting on Sept 26 on the sidelines of a United Nations General Assembly meeting in New York, Japan’s top government spokesman said on Friday.

To lay the groundwork for the summit, top trade negotiators of the two countries – Japanese Economy Minister Toshimitsu Motegi and US Trade Representative Robert Lighthizer – will hold their second round of trade talks on Sept 24.

Trump has made clear he is unhappy with Japan’s US$69 billion trade surplus with the United States, nearly two-thirds from auto exports, and wants a twoway agreement to address it.

There is uncertainty on whether Abe, who won a third term as premier in Thursday’s ruling party leadership race, can convince Trump through close ties he has forged with the president.

The threat of trade friction between Tokyo and Washington has been present since Trump took office last year with a pledge to renegotiate trade deals he considers unfair to US companies and workers.

Japanese government officials are growing increasingly worried that Trump will demand a reduction in the number of Japanese auto imports to lower the trade deficit.

They also fret that Trump could impose steep import tariffs on auto and auto parts, which would deal a severe blow to the export-reliant economy.

The United States is Japan’s second-largest trading partner, after China. Some officials say Japan may have no choice but to lower the number of cars it ships to the world’s top economy, because the United States is Japan’s closet ally and guarantees its defence.

“Given our position (close diplomatic relationship), we would have to swallow their demands,” said one government official, who spoke on condition of anonymity.