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U.S. mulls removing 2.5% tariffs on Japan vehicle imports

Japan and the United States are in the final stages of talks to open the possibility that, when the two countries conclude a bilateral trade agreement later this month, Washington will abolish its 2,5% tariff on vehicle imports from Japan in future, sources reported Sunday.

Japan suggested including the terminology in an amendment to the proposed trade deal opening the way for the United States to withdraw car tariffs in future, according to reports.

Tokyo argued that the expected trade agreement would breach World Trade Organization regulations requiring high levels of trade liberalisation, according to the reports.

Vehicles constitute a significant part of trade flows between the two nations, contributing as many as 30 per cent of Japan’s total value-added exports to the United States.

The office of the U.S. Trade Representative also acknowledges the need to prevent the situation where the trade agreement violates WTO rules, according to the reports.

The appendix will clarify the likelihood of renegotiating the trade agreement after a certain period, according to the sources.

But whether or not the US is unclear. President Donald Trump, who gives priority to saving employment in the automotive industry, must support this agreement. Even though he acknowledges it, auto tariffs are highly unlikely to be abolished.

For 25 years under the Trans-Pacific Partnership Free Trade Agreement, the United States agreed to lift the automotive tariffs before Trump came out of the agreement for 2017.

The Trump administration refused to accept high levels of auto liberalisation during the talks on the bilateral trade agreement. Japan agreed to allow the United States to retain its tariffs to keep Washington from introducing new levies.

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