(Bloomberg) -- Want to receive this post in your inbox every day? Sign up for the Terms of Trade newsletter, and follow Bloomberg Economics on Twitter for more.
With Japanese Prime Minister Shinzo Abe’s coalition on track to win a clear majority in the upper house Sunday, attention is likely to turn swiftly back to his policy agenda. And U.S. President Donald Trump may push trade up Abe’s priority list.
The pace of talks is expected to pick up rapidly in the coming weeks—and it could get a little messy. Trump has so far protected Japan from his threat of auto tariffs. But the U.S. president will want to see progress on a trade deal that addresses the U.S.’s almost $70 billion trade deficit with Japan and will require some concessions on farming, which is a sensitive area for Tokyo.
So far, it’s not clear what, if anything, the U.S. is willing to give Japan in return. Negotiations on the working level have been taking place weekly for more than a month and are resuming in Washington on Wednesday, according to a person familiar with the planning.
Japan is still developing its wish list and asking the Trump administration to lower or eliminate tariffs on a range of products, including auto parts and other industrial goods.
Japan’s Economy Minister Toshimitsu Motegi is expected to travel to Washington several times next month for negotiations with U.S. Trade Representative Robert Lighthizer, a person familiar with the plans said. Officials in both countries want to announce some sort of agreement when Trump and Abe meet at the UN General Assembly in September. But that’s an ambitious goal that will be hard to meet, a Japanese official said.
If talks aren’t moving fast enough, Trump might pull a familiar move: repeating his threat for duties on Japanese auto imports and opening another global front in his trade battle.
Charting the Trade War
Singapore’s exports plunged in June amid a collapse in technology-related shipments, according to data from Enterprise Singapore. Overall exports have been weakening since last year as a technology boom waned, but the outlook worsened considerably in 2019 amid a U.S.-China trade war.
Today’s Must Reads
- Mixed WTO message | The Geneva-based trade body gave the U.S. a victory and a rebuke in a dispute over American sanctions on goods made by Chinese state-owned enterprises.
- More Trump threats | The U.S. president reminded Beijing that he could hit more Chinese imports with tariffs as the two sides try to find a negotiating path to avoid escalating the fight.
- Europe’s car trouble | Sales fell sharply in June as companies including Daimler and BMW struggle with what’s shaping up to be the industry’s second year of softening demand.
- G-7 tax fight | The U.S. Treasury chief will clash this week with French Finance Minister Bruno Le Maire, who’s forging ahead with taxes Washington opposes on digital revenues of large companies.
- Bond villain | China’s holdings of U.S. Treasuries slipped for a third month in May, reaching a two-year low, just as trade tensions between the two countries neared a boiling point.
- Japan outlook | The economy faces challenges from U.S. tariffs to a looming sales-tax increase.
- Soybean selloff | Futures prices of corn and soybeans succumbed to Trump’s latest China threat.
- July 18: Japanese and Swiss trade data
- July 23-24: WTO General Council meeting
Like Terms of Trade?
Don’t keep it to yourself. Colleagues and friends can sign up here. We also publish Balance of Power, a daily briefing on the latest in global politics.
For even more: Subscribe to Bloomberg All Access for full global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.
WhatsApp: Join us on WhatsApp to get news, insight and analysis of the day’s top stories. Sign up here.
How are we doing? We want to hear what you think about this newsletter. Let our trade tsar know.
--With assistance from Isabel Reynolds.
To contact the author of this story: Jenny Leonard in Washington at email@example.com
To contact the editor responsible for this story: Brendan Murray at firstname.lastname@example.org, Sarah McGregorZoe Schneeweiss
©2019 Bloomberg L.P.