US, Japan trade tensions in focus during Pence visit

Vice President Mike Pence met with Japanese Prime Minister Shinzo Abe on Tuesday, where bilateral trade, and particularly Japan’s treatment of U.S. autos, were expected to be in focus.

“The United States has had a trade imbalance with Japan for too long. American products and services too often face barriers to compete fairly in Japanese markets,” Pence said at a media appearance with Abe, as reported by Reuters.

During a press conference earlier this month, President Trump said Japan treats America “very unfairly” with regards to its auto policies – shipping millions of cars to the U.S. while blocking U.S. imports.

According to data from the U.S. Census Bureau, as of September, the U.S. trade deficit with Japan was about $50 billion. The U.S. exported $54.8 billion worth of goods there and imported $104.8 billion.

Last year, the U.S. deficit with Japan was nearly $70 billion – owing in large part to auto imports. Japan ships around 1.7 million cars to the U.S. each year and Trump has threatened to slap Japanese auto exports with tariffs. A 20 percent levy could add as more than $8 billion to Japanese manufacturer’s costs, according to the Daiwa Institute of Research.

In addition to autos, the U.S. could target Japan’s tariffs on agricultural products as U.S. farmers seek more access to new markets. Agriculture Secretary Sonny Perdue said he expected a better agriculture deal from Japan than it gave to the European Union, as reported by Japan Times.

Trump said during a joint press conference with Abe in September that the two countries were starting bilateral trade negotiations, which would result in a deal that’s “better” for both countries. Talks, which are scheduled to officially begin next year, will be aimed at opening up the Japanese economy and limiting export curbs to the U.S.

Meanwhile, Trump is expected to meet with trade advisers at the White House on Tuesday to discuss drafting a proposal to implement auto tariffs on European carmakers, a White House source confirmed to FOX Business. The news was first reported by Bloomberg.