Japan Aims to Avoid Bilateral Free Trade Agreement With US

Forex News

Taro Aso (Japan’s finance minister and Deputy Prime Minister) ruled out the possibility of opening negotiations on concluding a bilateral free trade agreement (FTA) with the United States, in exchange for exemption from tariffs for steel and aluminum. According to the politician, such a deal will not bring benefits to his country. Currently, Japan is seeking exemption from US tariffs on imports of steel and aluminum with little success.

The politician stated that Japan aims to avoid bilateral trade deals with the United States, adding that when two countries negotiate, the stronger country gets stronger and would only create "unnecessary" pain for Japan. Some analysts say the agreement could set precedents for US trade deals with other countries, which would be a headache for Japanese policymakers keen to avoid bilateral FTA talks and any unwelcome yen growth.

Fears of a trade war increased this month after Donald Trump imposed tariffs on steel and aluminum imports, and then specifically targeted China by announcing plans for tariffs on up to $60 billion of Chinese goods.