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Trade war

Japan treads carefully to avoid US-China trade war crossfire

Abe lobbies Trump to delay pact with Tokyo until fall

TOKYO -- Japan is calculating the possible implications of U.S. President Donald Trump's latest tariff hike threat on Chinese goods, fearing that pressure on Tokyo for a quick trade deal may mount if negotiations with Beijing collapse -- a scenario Prime Minister Shinzo Abe wants to avoid.

Trump has speculated that a Japan-U.S. trade deal could be reached on his May 25-28 trip to Japan, which will welcome him as its first foreign state guest of the Reiwa era.

"I think it can go fairly quickly," he told reporters April 26 before meeting with Abe at the White House. "Maybe by the time I'm over there. Maybe we sign it over there. But it's moving along very nicely, and we'll see what happens."

Trump has pledged to put "America first" by redoing trade deals and is prodding Japan for an agreement in case negotiations with China break down, aiming to show results on the trade front to voters in the U.S. presidential election in 2020. Campaigning is already underway, with former Vice President Joe Biden recently throwing his hat into the ring as a Democratic front-runner.

But Japan wants to avoid a deal before its upper house election in July. In their one-on-one session April 26 after reporters left, Abe is said to have told Trump that the election renders a deal in May impossible.

The prime minister went over his political schedule with the president in detail, saying that even if they do reach a deal in May, nothing can be implemented until the Diet passes related legislation. Simply waiting until after the election will make no difference, Abe explained, since the next Diet session starts in the fall.

Abe also said he knows the U.S. presidential election is next year and promised a deal in time. Trump then told "Shinzo," using the prime minister's first name, that he understood. The leaders appear to have bonded over election talk.

Trump's attitude seems to have changed considerably since the 45-minute talk, as shown in a meeting with other high-level officials soon after. Trump intervened after U.S. Trade Representative Robert Lighthizer pushed for a quick deal, saying there is no need to rush now and that although he does not like deferring to another country, Japan has its reasons.

"Just as you are receiving pressure from industry groups, the Japanese agriculture lobby is strong," Abe told Lighthizer. "Rather than rush, it is important for both sides to reach an agreement through talks."

The U.S. had been advertising its desire to hasten negotiations with Japan. Lighthizer pressed Economic and Fiscal Policy Minister Toshimitsu Motegi for a quick deal, mainly on agricultural issues, at ministerial-level discussions in mid-April.

Abe apparently told close aides after returning home that he has greater confidence in his relationship with Trump now.

Trump and Abe have held 10 summits and four golf outings. The prime minister is far closer to the U.S. president than leaders from other major countries are. These include Chinese President Xi Jinping, who has held just four summits with Trump. Abe can negotiate directly with Trump when they have differences -- unlike Xi, who lacks a direct channel.

Trump tweeted Sunday that he will raise 10% tariffs on $200 billion in Chinese goods to 25% on Friday, saying the trade talks are proceeding "too slowly." He informed Abe of the plans again by phone Monday night.

Trump "just affirmed the existing policy," a Japanese official said.

Japan aims to arrive at a deal through a two-step process. It will first schedule another meeting in June between Abe and Trump, who will be in Osaka for the Group of 20 summit, and then reach a basic agreement after the upper house election. But the U.S. could take a harder line should negotiations with China reach an impasse or Trump suddenly shift course.

Abe seeks to secure as much time with Trump as possible during the president's Japan trip this month. The two leaders are scheduled to watch sumo wrestling in Tokyo and play some golf.

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