People familiar with the talks said Monday that the U.S. -Japan trade agreement was blocked at the last minute as Japanese officials asked the U.S. to ensure that the Trump administration would not impose national security tariffs on Japanese-made cars and auto parts.
U.S. President Trump and Japanese Prime Minister Shinzo Abe intend to sign a trade agreement at this week's United Nations General Assembly meeting in New York, which includes more Japanese access to U.S. agricultural products and bilateral tariff reductions on industrial products.
However, this limited range of trade agreements is not expected to include tariffs and adjustments to automobile-related trade provisions. Cars are the largest source of the US trade deficit with Japan of $67.6 billion.
Trump has so far failed to implement the threat of tariffs on automobiles and parts in Japan and Europe because the United States is negotiating with these trading partners.
Earlier, the New York Times reported that Japan had demanded a "sunset clause" that would eliminate all trade preferences to the United States once Trump imposed tariffs on Japanese cars.
Masato Ohtaka, spokesman for Japan's Ministry of Foreign Affairs, said Japan still wanted to sign a trade agreement with the United States by the end of September, and there was still time to resolve the remaining issues.
At a news briefing, he said U.S. Trade Representative Lethizer and Japan's Foreign Minister would discuss these issues later Monday evening.
Kanji Nishimura, Japan's Minister of Economic Regeneration, said that understanding that the trade negotiations between Japan and the United States are at the final stage, the goal is to reach an agreement. He pointed out that the remaining work, including the wording of the US-Japan trade agreement, was being accelerated.
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