Customs duties of 15 %
What does this agreement understand concretely? First of all, the fact that Japan will pay 15 % customs duties for the entry of its products to the United States, well below the 25 % surcharge that could have hit the archipelago. Japanese investments, up to $ 550 billion, are also planned on American soil.
To limit damage in its automotive sector, Japan therefore accepts huge concessions. “
According to Donald Trump, Tokyo also agreed to open Japan “To the trade of cars and pick-ups, rice and a number of other agricultural products, and other things”. “What Japan obtains in exchange is quite limited. The customs duties applied by the United States on cars from Japan, which had been increased to 25 % by the Trump administration, are lowered to 15 %. To limit damage to its automotive sector, Japan therefore accepts huge concessions”explains Éric Dor, director of economic studies at the Ieseg School of Management in Lille, in an analysis note. For Japan, the automotive sector was strategic. This sector alone represents no less than 8 % of jobs there and constituted almost 30 % of Japan exports last year to the United States.
The Beijing Summit will highlight the degradation of the relationship between China and the European Union
While the deadline of August 1 is fast approaching, the Financial Times reported this Wednesday that an agreement could be announced soon between the United States and the EU. According to the British business daily, it would be a copy-paste of the deal concluded with Japan, with customs duties of 15 % imposed on European products entering American soil.
As a reminder, Donald Trump, annoyed by the deficit trade balance of his country vis-à-vis the old continent, had taken the European Union short on July 12 by decreeing customs duties of 30 % on all imports from the EU from August 1. Europe, for its part, had drawn up a list of American goods to tax from August 7 in the event of the failure of the discussions, worth almost 100 billion euros.
This rate of 15 % – if he was confirmed in the coming hours or days – would therefore be half a lesser that the one Trump had agitated a few days ago as a scarecrow. But it would be superior to what European officials expected who still tapped on an agreement now a 10 % basic tax on European products, with exemptions for strategic sectors.
Still according to the FT, The EU and the United States would both give up customs duties on certain products, including planes, spirits and medical devices. German Chancellor Friedrich Merz mentioned on Wednesday, early evening, possible “Decisions” Imminent, confirming that commercial discussions have entered their final stretch.
Instead of reindustrialisation, it is an worsening of deindustrialisation that the EU will be confronted. “
For Eric Dor, this rate of 15 %, if it was confirmed, would be very bad news for the European economy. “”Customs duties of 15 % are in fact almost identical to the 14.8 % which already prevail now. It would therefore be resigned, taking into account the already achieved depreciation of the dollar, that the cost of acquisition in dollars of EU property by buyers of the United States is definitively increased by 23 % compared to the beginning of the year. And this could be further aggravated if the dollar continues to depreciate, which at least want part of Trump’s advisers “, He explains this Wednesday evening in an updated analysis note. And to prevent: “Sales of EU property in the United States will therefore decrease. There will therefore be reductions in production and employment for the EU’s concerned sectors. Companies will also be encouraged to close factories in Europe and relocate them to the United States to supply the American market, … and even European if the EU keeps unchanged, at a low level, its own customs rights on imports of goods from the United States. Instead of reindustrialisation, it is a worsening of deindustrialisation that the EU will be confronted “.
“All of economics is against this reasoning of Donald Trump … But there, we are no longer in reason”
For the economist, “Thusing intimidation is a dangerous strategy “. “It might be wise to risk the absence of agreement, to undergo customs duties of 30 % in the short term, but deploy sufficiently strong retaliatory measures, in particular on services, to force the United States to accept very quickly a much better balanced agreement in favor of the European Union “, he concludes.
“Alliance for competitiveness”
While waiting to see more clearly, the EU continues, in any case, to advance its pawns to strengthen and diversify its economic ties. It is in this sense that the EU and Japan launched on Wednesday an “alliance for competitiveness”. This new alliance is based on three pillars, detailed the president of the European Commission, Ursula von der Leyen.
The first is based on the deepening of trade, on the basis of the economic partnership agreement already in force since 2019. The EU and Japan intend to fully exploit its potential, in particular in the fields of public procurement, health and phytosanitary standards, and investments. The second pillar aims to strengthen economic security, in particular in terms of critical supply chains, such as those of raw materials and batteries. Finally, the third pillar emphasizes innovation and green and digital transitions.