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Donald Trump has threatened to increase taxes on Japan and has done doubt that the US would reach a deal with his Asian ally, escalating his trading rhetoric days before his break at some steep rates.
The US President said he would impose new taxes on countries that would not agree on 9 July, when the “reciprocal” rates would resume in April.
He also chose Tokyo, a crucial trading partner who had been to the first countries to have concluded a deal with Trump after he had shocked the world markets in April by launching a global trade war on “Liberation Day”.
“We have had to deal with Japan. I am not sure if we will close a deal. I doubt it,” Trump said.
“I will write a letter to say:” We thank you very much, and we know that you can’t do the kind of things we need, and that’s why you pay a 30 percent, 35 percent “or whatever the number we have determined,” he said. “Because we also have a very large trade deficit.”
The Japanese markets fell on Wednesday, with the exporter-oriented Nikkei 225 index decreased by 0.5 percent in the early afternoon and the benchmarktopix an increase of 0.1 percent. The yen departed at 0.2 percent compared to the dollar to trade approximately ¥ 143.75.
President’s comments suggested that Trump remained willing to take a hard line about negotiations with trading partners, despite the reduction of his higher global rates, in the light of deep market earlier this year.
The US imposed a rate of 24 percent on all entry from Japan on Trump’s so -called Liberation Day on 2 April, before it was temporarily reduced to 10 percent for 90 days to have conversations take place.
At the time, Trump claimed that he would sign 90 deals during the 90-day interruption, although only the UK concluded a new trade agreement with the US.
The threat to increase rates in the fourth largest economy in the world will increase the fear that Trump will restore a global trade war if his officials are not in line for his own deadline next week.
The president told reporters at Air Force One on Tuesday that he is not considering extending next week’s deadline for countries to allow conversations to continue.
He has accused Japan of being ‘spoiled’ and refusing to bind himself to buying more American rice or to leave cars manufactured by the US in its market.
Cars are the most important driver based on the value of the Japanese trade surplus of the Japanese goods with the US, which was $ 63 billion for the most recent financial year, followed by industrial machines and electrical machines. The largest import of Japan from the US was machines, energy and grains of power generation.
Japan is already confronted with a rate of 10 percent on most of its export to the US, but Japanese cars and car parts are also subject to a rate of 25 percent border load. Steel and aluminum face a levy of 50 percent.
The American and Japanese trade officials have been locked up in intense negotiations since earlier this year. Japan is slowly accepting that it will not be exempt from automotive rates, according to a person who is familiar with the conversations, but it wants a guarantee that every burdened deal will be final.
“Japan digs his heels in with a insistence that the US agrees that whatever the deal is, this is real, and there will be no further rate increases. Japanese companies must know exactly what the rate will be and will start planning, and therefore Negotels Tokyo for a deal that will hold a covenant to hold the person,” said the person.
