EnThe first meeting with President Trump of the U.S. and Prime Minister Abe of Japan went off without fireworks. From a trade perspective few specific points were discussed. A reference to future negotiations being based on a “bilateral framework as well as Japan continuing to advance regional progress on the basis of existing initiatives” does not suggest a short-term trade war. Indeed the talks did not set a deadline for negotiations.
Part of the discussion focussed on Japanese investment in the U.S. Panjiva calculations based on official figures show that Japanese foreign direct investment in the U.S. totalled 5.73 trillion yen ($50.4 billion) in 2016. That was 8.8 times the amount of U.S. FDI made in Japan and compares to Japan’s trade surplus with the U.S. of 6.83 trillion yen (ie 84% of the surplus was reinvested).
Source: Panjiva
The next step in trade talks will be the formulation of the new framework, which will be led by Vice President Pence and Deputy Prime Minister Aso. This further complicates the trade negotiation and strategic advice framework for the U.S. As discussed in Panjiva research of January 17 President Trump has made five senior appointments in the field in separate parts of the cabinet and White House. This move adds a sixth.
The positive sign from these talks, however, is that it shows a more moderated, diplomatic approach from President Trump when dealing with foreign leaders in person. Panjiva analysis shows that, once talks begin,
Panjiva’s analysis of each country’s top 200 export lines (defined by HS 6 code using U.S. export and import data) shows that, once talks begin, the focus will likely be on Japanese exports of autos, U.S. exports of agricultural and aerospace products and two-way trade in electronics and pharmaceuticals.
Source: Panjiva
