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International relations

Trump drives hard bargain in Japan at honeymoon summit

Abe now faces pressure to reach trade agreement in August

U.S. President Donald Trump shakes hands with Japanese Prime Minister Shinzo Abe during a joint news conference May 27 at Akasaka Palace in Tokyo.   © Reuters

TOKYO -- The relationship between the U.S. and Japan "has never been better than it is right now," President Donald Trump said here Monday prior to the summit with Prime Minister Shinzo Abe, though the ties will be tested by the bargaining in trade talks that now appear to have an August deadline.

By providing Trump the red carpet treatment during his state visit, the Japanese side succeeded in demonstrating the closeness between the two leaders. Trump, the first state guest of Japan's Reiwa era, was all smiles when greeted by cheering sumo fans Sunday at Ryogoku Kokugikan sumo hall in Tokyo.

Trump and Abe affirmed the value of the U.S.-Japan alliance as they discussed security issues involving North Korea.

"The bond [between the U.S. and Japan] has become unshakable, the closest in the whole world," Abe said Monday at the joint news conference following the summit.

Trump echoed Abe's sentiments.

"The alliance between the United States and Japan is a cornerstone of stability and prosperity in the region and all around the world," he said.

But in remarks to reporters before the summit, Trump hinted that this honeymoon relationship is not without some heavy give-and-take.

"Trade-wise, I think we will be announcing some things, probably in August, that will be very good for both countries," the president said. Abe appeared to momentarily give a questioning look upon hearing that statement.

When the two leaders met at the White House in April, the president made a similar prediction about reaching a trade deal, mentioning the possibility of an agreement happening during this trip. "I think it can go fairly quickly," Trump had said. "Maybe by the time I'm over there [in May]. Maybe we sign it over there."

At that time, Abe promised a trade deal would be inked before the 2020 U.S. presidential election, but not necessarily in May. The prime minister did not wish to hold a signing ceremony prior to the Diet upper house election this summer, which could reveal a lowering of Japan's tariffs on agricultural products.

In 2013, when Abe announced that Japan would participate in the Trans-Pacific Partnership trade negotiations, domestic farmers decried that move as "treachery."

This time around, it is clear that Abe stressed his electoral concerns to Trump. When the president tweeted on Sunday claiming "great progress" on trade, he added, "Much will wait until after their July elections where I anticipate big numbers!" The date of the upper house election has yet to be settled.

Trump will wait for a deal until after Japan's summer election, while Abe has pledged to deliver results on trade before the U.S. presidential vote. But this arrangement now places a burden on the prime minister: Abe will have to deliver the "big numbers" soon after the upper house election, perhaps by August.

Shrinking the trade imbalance between the two countries remains the big sticking point, as suggested by Trump's tweet Sunday. But the negotiating teams have yet to bridge considerable gaps.

Both sides agree in principle that tariffs should not be lowered further than what was agreed to in the TPP. But American negotiators, led by U.S. Trade Representative Robert Lighthizer, are not prepared to accept Tokyo's request to abolish automobile tariffs in stages.

The Tokyo side, led by Economic and Fiscal Policy Minister Toshimitsu Motegi, looks to avoid additional duties on Japanese autos, or restrictions on auto imports, but a resolution on either issue has yet to come into view.

If Trump were to slap punitive tariffs on Japanese vehicles, he likely would cite national security reasons as allowing such a move. When asked by a reporter Monday how he would justify designating Japanese autos as security threats, Trump called it "a balance sheet thing."

"To have a great military, you have to have a great balance sheet," he said. "We're building a tremendous balance sheet. But in order to have $716 billion a year in military expenditures, you have to have a lot of money coming in."

Though Trump has praised the investments by Japanese automakers that created American jobs, the president also suggests he is not above imposing higher duties on Japanese auto imports if the trade imbalance does not improve.

Trump also continues to distance himself from multilateral trade agreements, particularly the 11-member TPP that went into force in December.

"I have nothing to do with TPP. OK? Nothing to do," Trump said in the post-summit news conference, adding that he is not bound by the TPP-11 because the trade pact "would've destroyed our automobile industry and many of our manufacturers."

Tokyo parried U.S. trade pressure earlier in the Trump administration by entering into frameworks such as the bilateral economic dialogues. But Trump is focused on producing tangible results from trade deals he can tout to farmers and manufacturing workers in the U.S. Midwest ahead of the 2020 election. Japan no longer can buy time.

Members of Abe's ruling Liberal Democratic Party appear perplexed by what looks to be an August deadline to reach a trade deal.

"There are about 9,000 tariffs, so it won't be easy," said one attendee at a meeting held by senior LDP officials after the summit.

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