The consequences of Japan’s tariff deal that has been wildly negotiated with the Trump administration in recent weeks are still echoing in Tokyo.
Prime Minister Shigeru Ishiba said on Monday that the government is ready to develop additional budgets to manage the economic impact of U.S. tariffs. This could mean a further burden on the Bank of Japan.
Later, Isbon told parliament that he would not hesitate to hold talks with President Trump to ensure soon agreed cuts to U.S. auto tariffs.
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The Prime Minister raised some criticism from opposition lawmakers in official documents on the failure to sign a trade deal with the United States last month.
Deal “rush to cut car tariffs”
But he said: “Creating documents could delay the timing of tariff cuts. That’s our biggest fear.
“He is not a typical opponent to overturn the rules,” Ishiba said of Trump’s negotiation style.
Given that senior Ishiba officials said his response was a bit sarcastic No need to rush to sign a trade agreement – To postpone negotiations until after the important House of Lords vote.
Ishiba also said he had “absolutely no hesitation” to hold talks with Trump to get Washington to enforce tariffs as soon as possible, although he declined to comment on when such negotiations could be held.
“The two countries will start executing agreed content, which is harder than reaching a deal,” Ishiba said, saying he intends to stay as prime minister to see the process.
Ishiba is under pressure from its ruling Liberal Democratic Party Failed in last month’s election.
Japanese Trump’s trade agreement Last month, U.S. tariffs on imports of goods, including cars, eased pain for an economy that exports similarly.
But there is no doubt when the U.S. tariffs on cars will be reduced to 15% from the current 25%, casting a shadow on Japan’s fragile recovery prospects.
At the same parliamentary meeting, Japan’s top trade negotiator Ryosei Akazawa said it was hard to say how long the United States could actually implement car tariffs in the UK, but “more than a month.”
Possible additional budget for next month
After a stinging defeat in the House of Lords election last month, the minority coalition in Isbon is under pressure to raise demand from opposition parties to increase spending and reduce Japan’s business tax.
When opposition lawmakers asked whether the government would compile additional budgets that included tax cuts, Ishya told parliament: “When necessary, we will compile them when necessary.”
If the government wants to compile stimulus packages, an additional budget that will fund expenditures will be submitted to an extraordinary parliamentary meeting that may be held in September.
As politicians call for increased spending to support the economy, it has become a routine practice in Japan that even other countries retreated from crisis model spending after the Alliance’s 19th pandemic.
Ishiba has not commented on the size of possible additional budgets, but Some analysts It is expected to reach about 100 trillion yen ($67.68 billion), which will require additional debt issuance.
The additional budget will be above the record 115.5 trillion yen budget for the current fiscal year. In total, 24.5% of the expenses are spent on debt financing. With this deficit, the cost of capital may rise further Bank of Japan’s eyes more interest rates hikingAnalysts said.
As food costs continue to rise, opposition parties call for cuts or eliminates Japan’s business tax rate, which is 10%, except for 8% of food.
Ishiba, considered a fiscal hawk, is cautious about reducing business taxes, which raises social welfare costs for a rapidly aging population.
The rapidly aging population has large-scale spending packages for rapidly aging and intense social welfare costs make Japan’s economy account for 250%, the highest among major economies.
- Jim Pollard’s Extra Input and Editing by Reuters
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