Trump Expresses Confidence That Japan Purchases Will Resolve Trade Deficit
Even as President Donald Trump talked about his intention to announce tariff changes next week, he expressed confidence that Japan might be spared, because of their promises to buy more American exports.
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"As we deepen our economic relationship, I made clear that the United States will be conducting trade with all countries based on the principle of fairness and reciprocity. Chronic trade deficits not only undermine our economy, they really do, and we're going to get rid of the trade. We have a trade deficit with Japan of over $100 billion, but we're going to work that out, and I think very quickly, frankly, we can do it just on oil and gas. We can work it out, we intend to do it very quickly," Trump said in prepared remarks Feb. 7 at the start of a press conference after his first meeting with Japanese Prime Minister Shigeru Ishiba.
He bragged about Japan's investment of $800 billion in the U.S., and said the country's investment in the U.S. will go up "very, very substantially in the coming months," and talked about new Japanese brand auto plants under construction.
Ishiba said through an interpreter: "Today, I conveyed my willingness to cooperate together to elevate Japan's investment in the United States to an unprecedented amount of $1 trillion. President Trump and myself also concurred to elevate the Japan-U.S. partnership to an even higher level through improving [the] business environment and increasing bilateral investment and employment, strengthening each other's industries. ... We also confirmed that we will cooperate to strengthen energy security between the two countries, including increasing exports of the United States liquefied natural gas to Japan in a mutually beneficial manner.
"Regarding foreign exchange, as in the first Trump administration, close discussions will continue between Japanese and the U.S. finance ministers who are experts in this field."
When Trump was asked about whether he would be imposing tariffs on Japan, he talked broadly about reciprocal tariffs. He later, in response to another tariff question, said, "We didn't discuss tariffs too much" during the meeting, instead talking about how the U.S. and Japan could undertake a joint venture to construct a pipeline in Alaska to better serve the Japanese oil and gas market.
Ishiba said, "As the country of Japan, we are interested in importing not just LNG but also bio-ethanol, ammonia, and other resources at a stable price, a reasonable price from the United States, and we also want to improve the trade deficit that the U.S. has towards Japan."
Ishiba emphasized how foreign investment is equitable for both countries, and how Nippon Steel offering technology and money to U.S. Steel would be advantageous.
"So many jobs will be created. This will be to the benefit of the United States but also to the benefit of Japan. Also, investment is mutually beneficial," he said. "Better quality products will be made in the United States. It is not one-sided. It will be reciprocal. It will be mutually beneficial. That is the biggest result that I have seen today."
A reporter asked Ishiba if the U.S. were to hike tariffs on Japanese imports, would Japan retaliate?
"I am unable to respond to a theoretical question. That's the official answer that we have," he replied.
Trump interjected: "That's a very good answer. Very good answer. Wow. That's very good. He knows what he's doing."