Japan-US trade war under the Trump administration: from the US withdrawal from the TPP to the Japan-US trade agreement

Abstract

The US' withdrawal from the TPP (Trans-Pacific Partnership) marked the beginning of a new era in the Japan-US trade relationship, which might have turned into a bilateral trade war if the two countries couldn't have reached agreement. While the US preferred a bilateral deal, Japan preferred for the return of the US to the TPP. The two governments 'fought' during several stages of trade negotiations, from the Japan-US Economic Dialogue in April 2017 to the Japan-US Free, Fair and Reciprocal Trade Talks in April 2018, and to the negotiation of the Japan-US Trade Agreement from April to September 2019. US mobilized the bluff of applying additional tariffs on automobiles and auto parts under Section 232 of the 1962 Trade Expansion Act. Japan countered this with the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), as its market access commitments on beef and pork, etc. under the CPTPP would lead the US ranchers/farmers at a competitive disadvantage. The result was a victory for the US in the short term, as it gained market access commitments on beef and pork. But Japan was a close loser as it could keep the TPP alive.