Japan dodges US auto tariffs, for now, as Trump and Abe agree on trade talks

By Business LeadersFOXBusiness

(AP Photo/Lynne Sladky)

President Donald and Japanese Prime Minister Shinzo Abe agreed on Wednesday to start trade talks in an arrangement that, for now, protects Japanese automakers from further tariffs.

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The two countries said in a joint statement the talks "will respect positions of the other government," drawing lines on autos and Japan's agriculture sector, according to Reuters.

Japan has a $69 billion trade surplus with the United States with  nearly two-thirds coming from auto exports.

Trump wants a two-way agreement to address it.

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Wednesday's statement said a deal governing the auto sector would be written to boost production and jobs in the United States.

Tokyo had worried that Trump could demand a reduction in auto imports from Japan or that he could impose steep tariffs on such imports on national security grounds.

While economists saw the agreement as a positive outcome for Japan for now, they noted what would ultimately be agreed upon was still unknown.

Shares of Subaru  and Mazda Motor, two of the most export-reliant Japanese automakers, rose 3 percent and 1.2 percent respectively, outperforming a slightly weaker Tokyo market.