What about the car tax that has been shelved in the Japan-U.S. trade deal?

How will the Japan-U.S. trade relationship continue under the new Biden administration?

Last week, U.S. President Joe Biden gave his first foreign policy speech as president. In addition to announcing a series of foreign policy changes, Biden said the United States would focus on repairing relations with its Allies. This has come as a relief to America's traditional Allies, including Japan.

Although the foreign trade policy of the new Biden administration has not been clearly outlined, Japanese media believe that it will be different from the previous four years of Trump's presidency at least. "Biden is likely to focus on multilateral trade negotiations and will ask Japan to push for greater market opening to restore the US economy hit hard by the epidemic," it said.

It is worth noting that under Mr Trump, Japan and the US have reached a "mini-version" of a trade deal and shelved some "hard bones". If there is no pandemic disruption in 2020, the deepening of the Japan-US trade agreement will continue. But now, how the follow-up talks, which have been put on hold by the outbreak, will continue in the Biden administration, is of great concern to Japan.

When Biden won the US presidential election in November last year, Japanese Prime Minister Yoshihide Suga immediately sent a congratulatory message to Biden. In the phone call at the time, Mr. Suga's more direct appeal, beyond his congratulations, was to seek to build a relationship of trust and renew trade cooperation between Japan and the United States. To this end, the Japanese government also actively coordinated efforts to put Suga's "visit to the United States" on the agenda, determined to see Biden first.

Or reboot in the fall

"If bilateral/multilateral trade talks are not a priority for the new Biden administration, the Japanese government will still face pressure from trade associations such as agricultural products and automobiles when the talks resume," the Japanese media said.

In January 2020, a Japan-U.S. trade agreement was reached, but it did not cover all areas of trade between the United States and Japan. American farmers were the biggest winners from the deal. Under the terms of the agreement, Japan wants to cut tariffs on about $7.2 billion of U.S. agricultural products, including beef, pork, wheat, cheese, corn and wine. A small amount of Japanese agricultural products, such as flowers and soy sauce, and industrial products such as machine tools, bicycles and Musical Instruments have also received tariff reductions from the US side.

The import tariff on US pajak progresif mobil will be cut from 38.5% to 26.6%, and eventually to 9% in 2033. The move cleared the way for American beef to enter the Japanese market in a big way. The same is true for U.S. pork, where tariffs on exports to the Japanese market will fall to zero in 2027.

The car tax is seen as the hardest nut to crack. At that time, the two sides planned to continue talks on the car tax issue in April 2020, in an effort to reach a supplementary agreement under "Stage 2".

So far, the Biden administration has not disclosed a timetable for the resumption of negotiations with Japan. Junichi Sugawara, a senior research fellow at Mizuho Research Institute, told China Business News that he did not expect the resumption of negotiations on the "Phase II" trade deal to take place earlier than this fall. "He (Biden) first needs to boost the competitiveness of domestic industries."

According to Sugahara, Biden essentially shares former President Trump's so-called "America First" philosophy. "Although he will not adopt the same strategy as Trump, he will not 'soften' in subsequent trade talks with Japan, such as asking for more market opening in Japan," Sugahara said.

At the same time, Sugahara also stressed that the Biden administration, with its strong Democratic Party brand, is likely to impose stricter requirements on environmental protection and labor protection in Japan.

Lack of bargaining leverage

If the Biden administration chooses to return to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), it will put pressure on Japan in the agricultural sector, said Terada Takashi, a professor of international relations at Japan's Doshisha University. "If Biden does so, the Suga government will be running out of time to respond as the lower house of Japan's parliament is up for re-election in October." He said.

In Mr Terada's view, how Mr Suga restarts trade talks with the US is directly linked to the re-election of the lower house. "Many LDP lawmakers share the interests of the farmers' groups, so they will certainly be reluctant to synchronize the election with the trade talks with the United States."

Moreover, Mr. Sugahara argued that the Abe administration had given preferential tariff treatment to American beef and pork when they entered the Japanese market, leaving Mr. Suga with few cards left to play. He also said it was "unrealistic" for Japan to ask the United States to lift its 2.5 percent tariff on imported cars. "After all, the governments of both Japan and the United States regard industrial revitalization as a priority for domestic economic recovery. "The auto industry is obviously a part of that."

Therefore, when talking about the inevitable auto tax issue in the "Phase II" negotiations, Sugahara was slightly pessimistic. "It is obviously unrealistic that the Japanese government hopes to raise more demands in the areas that the United States may focus on protecting when there is no bargaining chip in the game."