China Daily Global Edition (USA)
‘Let’s talk’: Japan tries to avert flare-up
TOKYO — Economic talks between the United States and Japan, tackling topics from persimmons and potatoes to energy and infrastructure, have helped keep Tokyo clear of protectionist moves such as those that recently hit Chinese solar panels and washers from the Republic of Korea.
Japan hopes that “let’s talk” approach — plus warm personal ties between Prime Minister Shinzo Abe and President Donald Trump — will keep friction in check. But officials and lawmakers say the outlook could change if the unpredictable US leader turns his attention to Tokyo’s 7 trillion yen ($63.6 billion) trade surplus ahead of US congressional elections in November.
“Naturally, America wants an early conclusion to what to do about its trade deficit (with Japan). Of course, they are concerned about the midterm elections and may say various things,” said a ruling party lawmaker well-versed in US-Japan economic ties, one of eight officials and lawmakers interviewed by Reuthird Japanese government source ters who declined to be identified because of the sensitivity of the subject.
“Suga is worried,” he added, referring to Abe’s close aide, Chief Cabinet Secretary Yoshihide Suga.
Efforts to showcase the US-Japan security alliance in the face of Pyongyang’s nuclear and missile threats will probably take precedence over trade when US VicePresident Mike Pence visits Japan from Tuesday, officials on both sides said.
Pence will not hold a formal round of the so-called “economic dialogue” with Deputy Prime Minister Taro Aso while in Tokyo. The two last met for a second round in October, when, among other things, they agreed to lift restrictions on Japanese persimmon exports and US Idaho potato imports as well as streamline noise and emissions testing for US auto imports.
“Japan’s strategy could be said to be very simple — keep this channel of economic dialogue open,” said one Japanese government source familiar with the government’s thinking.
US Treasury Secretary Steven Mnuchin’s comments late last month that a weak dollar would help US trade imbalances in the short term boosted the yen sharply against the dollar. It was a reminder of how currency could come into focus if trade friction revives.
Japan is waiting to see what decision the White House takes on an inquiry into steel imports under Section 232 of a 1962 US trade law allowing restrictions to protect national security. Action against an ally like Japan or the ROK, two of the sources said, could be problematic.
Japan’s largest steel-maker, Nippon Steel and Sumitomo Metal, has said Japanese exports are not hurting US rivals. “We hope the US will make a wise decision,” a company official said.
William Hagerty, the US ambassador to Japan, has said Washington wants to see progress on cutting Japan’s trade surplus and forging a bilateral framework — which Tokyo opposes — by spring.
The Japanese government, sources said, is to present plans already in the works to buy more US military gear as a gesture to please Trump, who brought up the sector during a November visit to Tokyo.
Japan plans to buy $3.7 billion worth of US military equipment in the year starting in April and is working on a new five-year overall procurement plan that would start in 2019.
Japan’s strategy could be said to be very simple — keep this channel of economic dialogue open.”