Japan’s trade negotiator is putting the screws to the Trump administration

Dairy farmers are pushing hard for a deal with Japan. Ukranian dairy was recently approved for sale in Japan; Europe and Japan recently implemented a free trade agreement that covered cheese imports. While the trade war with China has been getting all the attention, recent trade data out of Japan shows Trump’s anti-trade policies have been seriously hurting American farmers in the world’s 3rd largest economy. Notably, market share of meat and dairy products has plummeted as Japan increases imports from CP-TPP countries and the European Union and decreases imports of American products. The Trump administration is desperate to shore up support with farmers hurt by his multi-front trade war before the coming election and has been fast-tracking negotiations with Japan to try to seal a deal by next month. The Japanese trade negotiator, on the other hand, today seemed to talk down ongoing negotiations between the two countries, saying the two sides “failed to close the gap” on key issues.

Japan has for decades been a close, almost servile ally to the United States, but after the Trump administration’s sudden withdrawal from the Trans-Pacific Partnership has begun pivoting toward China and Europe as potentially more reliable partners. Recently, Japan and China issued a joint statement of their intention to deepen economic cooperation and this year Japan and Europe implemented a free trade agreement. The Abe government recently survived a contentious election and is not under the political pressure the Trump administration is to act quickly and last quarter Japan’s aging, stagnant economy stunned economists by growing at four times the projected rate. As the NHK reports, it appears the Japanese negotiator is trying to secure a favorable deal from an increasingly isolated America, demanding lower tariffs on Japanese industrial products in exchange for issuing a lifeline to a key Republican constituency.

Art of the Deal: Trump has bragged about his negotiation skills, but alone he has failed miserably. He bargains from a position of weakness and is in a big hurry. These are always bad signs it turns close allies into adversaries.