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US May Not Increase Tariffs On Japanese Cars

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The United States will make a commitment not to hike tariffs on Japanese cars or introduce quotas to the number of cars imported to the country, the Tokyo Shimbun newspaper reported. This will be the highlight of a joint statement that the leaders of the two allied countries are expected to issue after their meeting in New York next week, according to the Japanese newspaper.

Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump had hinted at the possibility of signing a trade deal after the two sides reached an agreement on its core elements on the sidelines of the G7 Summit in Tokyo last month.

The threat of higher U.S. import duty on Japan's multi-million dollar car industry had been hanging like Damocles' sword since last year.

In return for the decision not to increase car tariff, Japan will reduce or abolish tariffs on beef, pork and wheat imported from the United States, and tariffs on U.S. wine will be reduced to zero, the Tokyo Shimbun reported.

Japan and the U.S. are giving final touches to the new bilateral trade deal at cabinet level, according to the newspaper.

The ease of trade tension between the two major economic powers comes ahead of the next round of trade talks between the United States and China, scheduled for next month.

The latest round of China-U.S. high-level trade talks will take place in the background of retaliatory tariffs that the two trade rivals imposed on each other this month.

Although Trump claims that the punitive measures are intended to pressure China to change its policies hazardous to the US economy, the cost of the additional tariffs on Chinese imports are passed on to U.S. consumers.

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