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Economy

Upcoming US-Japan talks a 'big step' toward bilateral deal

Top White House economist says auto tariffs a 'work in progress'

Kevin Hassett, chair of the Council of Economic Advisers, speaks to Nikkei in Tokyo on August 1. (Photo by Akikazu Ishii)

TOKYO -- Trade talks next week between the U.S. and Japan will be "a big step" toward negotiations for a bilateral agreement, the White House's chief economist told Nikkei here Wednesday.

"We respect" President Donald Trump's view that "the best way to move forward on trade is to have bilateral deals," Council of Economic Advisers Chairman Kevin Hassett said. The first cabinet-level meetings under the "free, fair and reciprocal" framework will take place Aug. 9. 

Hassett also acknowledged that the Trump administration is still considering whether to place import tariffs on autos, calling the process a "work in progress." The White House is studying whether to impose duties based on national security concerns, the same rationale used for levies on aluminum and steel earlier this year.

Moreover, Hassett forecasts that the U.S. economy will grow an annual 3% on average over the next five years to achieve its longest expansion in the postwar era, citing Trump's tax cuts as the biggest contributor. The overhaul will add "perhaps as much as half a percent of GDP growth over the next 10 years," he said.

The longest postwar growth streak for the U.S. is 10 years, set during the economic boom of the 1990s. The current phase of economic expansion began in July 2009 and is thus entering its 10th year.

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