A closer look at the US-Japan deal with Jesper Koll

In a July 23rd interview with the BBC, Jesper Koll, expert director at Monex Group Japan, shared his insights on the newly announced US-Japan trade deal.

BBC Asia Business Correspondent Suranjana Tewari offers additional insights after Jesper Koll in the above video.

Jesper Koll Key Takeaways

• Koll described the US-Japan trade deal as a win-win, particularly from Japan’s perspective.

• The deal reduces US tariffs on Japanese cars to 15%, avoiding the previously threatened 25% or even 32% for the auto sector.

• Japanese carmakers welcomed the deal, as the 15% tariff significantly benefits their industry and is seen as a reasonable price to pay if it helps keep made-in-China cars off the streets of the United States; with Chinese-made cars becoming increasingly competitive in quality, the tariff acts as a form of protection for Japan’s auto industry.

• Japan is expected to make major investments in the US, potentially including joint development of Alaskan oil and gas resources.

• The deal may also lead to increased purchases of American agricultural products like rice by Japan.

• The timing of the announcement was strategic, as it came just before EU-Japan and EU-China trade talks, signaling America’s intent to “divide and rule.”