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Japan PM: Car Trade Imbalance Not Japan’s Fault

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Japanese Gentleman's Agreement

When President Trump was sworn into office, it seems fair to say that Asia-Pacific trade agreement was unpopular with the new administration, especially since withdrawing from it was one of the first things that the administration did.

Part of this discontent was aimed at Japan, which while being one of our strongest allies in the Pacific is also the source of a large trade disparity, especially in car sales, with Japan exporting 1.6 million vehicles to the US while only taking in a paltry 19,000 or so. This trade disparity was described as “unfair” by President Trump.

However, when the issue was brought up to Japanese Prime Minister Shinzo Abe in parliament, Abe responded that the trade disparity isn’t due to anything that the government was doing. Both Abe and Trade Minister Hiroshige Seko pointed out that there are no tariffs on American vehicles.

Abe added, “[…]if you go outside, you will realize that there are quite a lot of European cars, but no American cars and there are reasons for that. There are no dealers, they don’t exhibit at the Tokyo Motor Show and they don’t advertise on the television or in newspapers. Makers from some countries make an effort by switching the steering wheel to the other side.”

With this statement, it seems that Abe believes that the trade problem is more or less due to public perception of American automakers as well as lack of effort by the automakers to entice buyers.

This will most likely come up again soon, as Prime Minister Abe and President Trump will be meeting on February 10th to discuss trade issues.

News Source: Bloomberg