Last night, President Trump announced a trade deal with Japan that includes a 15 percent tariff on Japanese goods entering the United States. This decision has drawn criticism from experts at the Competitive Enterprise Institute (CEI), who argue it will lead to increased costs for consumers.
Iain Murray, CEI Vice President for Strategy and Senior Fellow, stated: “The US-Japan deal shows that the President has replaced ‘win-win’ with ‘lose-lose.’ The deal is better than what Japan was threatened with a few weeks ago, but it might still cause PM Ishiba to lose his job. American consumers will lose as they pay much more for Japanese goods than they did previously, and bizarrely the domestic auto industry will face stiffer competition as Japanese whole car imports will face a lower tariff than the combined impact of tariffs on imported vehicle components like copper and finished parts from Canada. The only winner is President Trump, who apparently gets to personally direct where $550 billion of Japanese investment will go, which is hardly the operation of the free market in action.”
Ryan Young, CEI Senior Economist, added: “This is a lose-lose trade deal for both America and Japan. Six months ago, Americans were paying roughly 2 percent tariffs on Japanese products. Now we will pay a 15 percent tax, or nearly a seven-fold increase.”
Young further noted: “While this is a smaller tax hike than President Trump’s threatened 25 percent tariff, it is still a big loss for American consumers and retailers, as well as American manufacturers who use Japanese components. Fifty percent tariffs on steel and aluminum will remain in place.”
