President Donald Trump said on Monday that his administration had reached an initial trade agreement with Japan that is focused on agricultural exports.
If the news is confirmed, this could provide relief for US agriculture that is losing market share in China. For Japan, this would mean low tariff access to the US industrial and digital trade markets.
The deal is unlikely to include steel but could shield Japan from tariffs on cars.
In a letter notifying Congress, the White House notified of its intention of entering a trade agreement with Japan regarding tariffs rules governing digital trade.
The administration has been trying to set the framework of the American-Japanese bilateral agreement before Trump travels to meet prime minister Abe at the United Nations General Assembly in New York.
Trump pulled the United States out of a multilateral trade deal with Pacific nations (the Trans-Pacific Partnership TPP) that provided for low tariff access to Australia, New Zealand, Malaysia, Singapore, Vietnam, and Japan. Japan was initially pressing for the US to rejoin the agreement; Abe now appears willing to grant TPP terms on a bilateral basis, making clear Washington would not get better terms than those extended to the ten TPP signatories.
Japan currency has a $67bn trade surplus vis-à-vis the US, which the Trump administration has vowed to reduce.