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Trump Signs US-Japan Trade Pact with High Priority for Farmers

Trump Signs US-Japan Trade Pact with High Priority for Farmers

President Donald Trump has called his new trade deal with Japan a "phenomenal" victory for US farmers.

Within days of becoming president, Trump pulled the U.S. out of the Trans-Pacific Partnership, a multilateral trade deal that would have given the country greater access to countries like Japan, Australia, Vietnam, and Singapore.

Under the agreement, the Office for the United States Trade Representative said 90 percent of US food and agriculture products that Japan imports will either not be taxed entirely or will have limited tariffs.

U.S. butter, skim milk powder and evaporated milk, along with some grains, would have competed with other TPP signatories for Japan's new import quotas under the Pacific Rim deal.

While rewarding American farmers, the new US-Japan deal does not resolve differences over trade in autos.

"These deals are a game-changer for our farmers and our ranchers", President Trump said at the White House.

Automakers in Japan had hoped that 2.5% tariffs on Japanese cars would be eliminated as part of the agreement.

Wheat producers also said they have been told by the Trump administration that tariffs on exports to Japan will drop in line with tariffs on Australian and Canadian wheat.

The Japan bilateral agreement keeps intact essentially all the trade benefits the United States would have gained in Japan under TPP.

Japan had until recently rebuffed trade talks with the United States, insisting that the country rejoin the previously agreed partnership.

Trump has long complained about America's large trade deficit with Japan, which came to $58 billion past year. It also reduces U.S. tariffs on Japanese turbines, machine tools, bicycles, green tea, and flowers, among other products.

The countries inked the deals as Mr. Trump prepares to slap levies on $7.5 billion worth of European Union imports in retaliation for years of unfair subsidies to Airbus, an aerospace company that is the main rival to Boeing.

"A reduction of tariffs, giving us a preferred rate with the Japanese", he said. United States bourbon and Tennessee whiskey had won some labeling protections in TPP along with tariff reductions.

The deal opens Japanese markets to some $7 billion in American agricultural products, including beef, pork, wheat, corn and cheese. Cloud computing and new financial technologies were still new and being developed during the many years the TPP was negotiated, so that deal included carve-outs that would have allowed some countries to require local housing of financial sector data.

The agreement meets the same gold standard on digital trade rules that was set by the President's landmark United States-Mexico-Canada Agreement (USMCA).