The U.S. government has pledged to rectify a presidential executive order, which will result in the removal of overlapping tariffs on Japanese goods.
US, Japan Resolve Tariff Error – Auto Duties Revised
Ryosei Akazawa, Tokyo’s trade negotiator, announced on Thursday that the U.S. has agreed to adjust the order following discussions in Washington. The revision will prevent a 15% tariff on Japanese goods from being applied to products already subject to higher tariffs, such as beef, reported Nikkei Asia.
The Tokyo official also indicated that U.S. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent have pledged to refund excess duties collected due to the error. Bessent and Lutnick also confirmed that President Trump would issue a separate executive order to reduce auto tariffs from 27.5% to 15%, aligning with the trade agreement reached with Japan last month.
Akazawa, who has made nine trips to Washington since April, expressed surprise at the clerical mistake and called it “regrettable” oversight. The clarity on the tariff changes, coupled with strong corporate earnings, led to Japan’s broad Topix index surpassing the 3,000-point mark for the first time.
Economists See Japan Trade Pact Harmful For US Automakers
Japan is among eight key U.S. trading partners to finalize a trade agreement, securing a 15% tariff on many of its goods — a rate seen as relatively low. On August 7, the U.S. began applying higher tariffs on imports from several nations, including Brazil, Switzerland, and Canada. Japan also pledged an additional $550 billion investment in the U.S.
The U.S.-Japan trade deal has been a contentious issue. Economist Justin Wolfers previously argued that the agreement essentially resulted in a tax increase for American consumers. He expressed skepticism about the benefits for U.S. auto companies, despite Commerce Secretary Lutnick’s assurances that American auto CEOs were in favor of the deal.
US Automakers Wary Of Japan Trade Deal Hurdles
The American Automotive Policy Council, which represents General Motors (NYSE:GM), Ford (NYSE:F) and Stellantis (NYSE:STLA) voiced concerns over Japan's deal with the Trump administration, similar to their reaction when a trade framework with the U.K. reduced tariffs to 10% on certain luxury cars made in England, including Rolls-Royces, Bentleys, Land Rovers, Jaguars, and Aston Martins.
While Trump declared that for the first time ever, Japan is opening its market to U.S vehicles, Wolfers stated that it may be challenging for American carmakers due to technical issues and different certification norms. "They don't drive American cars because they don't meet Japan's needs,” the economist told CNN.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
