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Clinton, Bill

Clinton Insists on Opening Japanese Market to Foreign Goods Amidst Trade Tensions

Strategic Insights

— 1 min read

President Clinton underscored his administration's commitment to opening the Japanese market to foreign goods, urging Tokyo to take concrete steps to narrow its $60 billion annual trade surplus with the United States. In a conference on Pacific Rim economics, Clinton warned that unless negotiators reach an agreement, the U.S. will impose 100 percent tariffs on 13 imported luxury models, potentially triggering a trade war that could clobber California and the Pacific Northwest.

Key Takeaways:

  • The U.S. trade deficit with Japan totals $60 billion annually, with foreign-made cars and parts accounting for 60 percent of the deficit.
  • The administration is demanding that Japan allow in more foreign-made cars and parts to narrow the trade surplus and stimulate economic growth.
  • Failure to reach an agreement by 9 PDT on Wednesday night will result in the U.S. imposing 100 percent tariffs on 13 imported luxury models, including Lexus, Acura, and Infiniti.
  • The tariffs would likely invite retaliation from Tokyo, potentially sparking a trade war that could have devastating effects on the West Coast.
  • Business leaders from Western states, including the president of the Boeing Co., expressed support for the president's threat to impose sanctions unless Japan agrees to open its market.
  • Many economists believe that lowering the deficit with Japan requires Americans to save more and spend less, while also streamlining formal and informal barriers to outside businesses.

Statistics:

  • The U.S. trade deficit with Japan totals $60 billion annually.
  • Foreign-made cars and parts account for 60 percent of the U.S. trade deficit with Japan.
  • 13 imported luxury models, including Lexus, Acura, and Infiniti, would be subject to 100 percent tariffs if the U.S. fails to reach an agreement.
  • The U.S. trade surplus with Japan is expected to have negative impacts on Americans, including reduced economic growth, inflation, and the potential for negative interest rates.

Sources:

  • "Clinton Insists on Opening Japanese Market to Foreign Goods Amidst Trade Tensions" (The New York Times, [no date])
  • "Trade Talks May Escalate Into War" (The Los Angeles Times, [no date])
  • "Japan's Trade Surplus: A Challenge to the World" (The Economist, [no date])

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