Policy · Trade policy
US–Japan trade deal and digital trade deal take effect
- From
- Government of Japan (Tokyo)
- Covers
- U.S. government (USTR), Washington, D.C.
- Value
- Not disclosed
- Status
- In force since January 1, 2020. Autos and auto parts were left out of this first-stage deal.
- Date
- 2020-01-01
Two agreements signed on October 7, 2019 took effect on New Year's Day 2020. Under the trade agreement, Japan cut or removed tariffs on about $7.2 billion of US farm goods such as beef, pork, cheese and wine, so that about 90% of US food and farm exports to Japan enter duty-free or at preferential rates once fully phased in. The separate digital trade agreement bans customs duties on digital products sent electronically and protects cross-border data flows. Autos were not covered.
Why it matters
The deal lowered the tension that had built up over possible US tariffs on Japanese cars and set the trade baseline for the period when Japanese investment in US factories and companies kept growing.
Key farm changes
Japan's tariff on US beef fell from 38.5% to 26.6% when the deal took effect and is set to drop to 9% by 2033, the same path as for members of the CPTPP trade pact. Rice was left out. Japan gave the US the same terms its Pacific trade partners had won, after the US left the TPP talks in 2017.
The digital deal
The separate digital agreement also bars rules that force companies to hand over software source code or keep data on local servers.
Sources
Kakehashi M&A News home
