Donald Trump slams unfair Japan trade agreements and tells Japanese to build their cars in America

On his second day in Japan, Donald Trump says Japan has been 'winning' on the trade front

President Donald Trump told a gathering of business leaders in Tokyo that Japan has an unfair advantage on trade and that he intends to fix that imbalance by making it easier to do business in the US.

"For the last many decades, Japan has been winning. You do know that," he said Monday. "Right now our trade with Japan is not fair and it isn’t open."

Trump laid out his complaints about how Japan treats the US unfairly in his eyes, noting that few American cars are sold in Japan and making a plea for Japanese carmakers to build more in the US.

“Try building your cars in the United States instead of shipping them over. That’s not too much to ask," Trump said. "Is that rude to ask?”

Trump is on the first stop of a five-nation swing through Asia where he plans to push his message of fair trade and freedom in the region backed by a strong US military presence. The US’s $69bn (£52bn) trade deficit with Japan is its second-highest behind only China, fuelled largely by American imports of cars and electronics.

Prime Minister Shinzo Abe has courted Trump’s friendship in a bid to ensure that trade tensions don’t impact a military alliance with the US that ensures Japan’s security in the face of threats from North Korea and China.

Abe has pushed back on Trump’s remarks about US car sales in Japan, saying earlier this year that a lack of advertising and dealerships played a role. He has also emphasised how Japanese companies are creating jobs in the US.

Japan’s biggest car trade association says that 75 per cent of Japanese-brand vehicles sold in the US are built in North America. Toyota and Mazda are pressing for an incentive package of at least $1bn from US states trying to land their planned $1.6bn joint car factory. The shared factory the Japanese carmakers plan to open in 2021 is the only new car assembly plant to be announced since Trump became president.

Toyota spokeswoman Akiko Kita declined to comment on Trump’s speech.

White House officials say they’re eager to recruit more Japanese companies to hire American workers. Japanese companies currently employ around 850,000 US workers -- a number Trump is hoping to grow -- with carmakers like Toyota and Honda already having sizable plants in the US.

TPP Hurdle

That effort may be hampered by Trump’s decision on entering office to withdraw from the Trans-Pacific Partnership, a 12-nation free trade agreement. Japanese officials are still stinging from the decision, and have said they’re eager to either negotiate a bilateral trade deal with the US or win Trump back to the multinational agreement -- which seemed unlikely in light of Trump’s defence of his pullout from the pact.

"TPP was not the right idea,” Trump said on Monday. “I’m sure some of you in this room disagree, but ultimately I’ll be proven right."

Trump said he envisions easing trade restrictions in another way, outside the TPP framework, but offered few details beyond saying that he personally had the power to speed business deals that had been hung up in the past.

He cited the Keystone and Dakota pipelines that he been held up under the Obama administration. "In my first week, I approved both," Trump said.

Trump also took credit for recent record stock market highs and an addition 2 million workers in the workforce, saying: "I’ve reduced regulations terrifically if I do say so myself."

‘Act of Evil’

Ahead of the speech, Trump addressed the church shooting in Texas that killed at least 26 people, calling it an "act of evil" and pledging his administration’s full support to state authorities.

“We cannot put into words the pain and grief we all feel, and we cannot begin to imagine the suffering” of those affected, Trump said.

Among the Japanese companies in attendance for the speech, according to the White House, were several carmakers, including Honda; Mazda, and Nissan. Also in attendance were ANA, Fujifilm, Hitachi and Softbank, represented by chairman and chief executive Masayoshi Son.

US companies included Boeing, Dow Japan & Korea, Eli Lilly & Co, Johnson & Johnson, Intel and Lockheed Martin. Trump singled out a Boeing representative at the breakfast.

"We are proud for instance that after the United States, Japan is largest owner of Boeing aircraft. Greatest commercial aircraft in the world," Trump said. "Melania had some of your stock. You know what happened? When I won she was forced to sell it."

Trump is expected to meet with Abe for discussions on the progress of an economic dialogue undertaken by Vice President Mike Pence and Japanese Deputy Prime Minister Taro Aso.

Those talks have largely focused on differences with currency and trade, with the US pushing to lower agricultural tariffs and restrictions on American car sales in Japan. American negotiators are pushing for Japan to remove a safeguard mechanism on imports of US frozen beef that have increased tariffs to 50 per cent from 38.5 per cent.

Bloomberg