Prime Minister Shinzo Abe said there were reasons for poor sales of American cars in Japan, pushing back after U.S. President Donald Trump described the trade imbalance on vehicles as “unfair.”
His comments on Monday in parliament signaled that automobiles would be a contentious issue in any bilateral trade negotiations. They came a week after Trump contrasted healthy Japanese car exports to the U.S. with the almost non-existent sales of American cars in Japan. The two leaders agreed on Saturday to meet in Washington Feb. 10 to discuss security and trade issues.
Asked in parliament if Japan was doing anything to prevent the entry of U.S. cars, both Abe and his trade minister, Hiroshige Seko, pointed out there are no tariffs on American vehicles.
“It’s not only President Trump, but U.S. officials at all levels often bring this up,” Abe said. “I tell them, if you go outside, you will realize that there are quite a lot of European cars, but no American cars and there are reasons for that. There are no dealers, they don’t exhibit at the Tokyo Motor Show and they don’t advertise on the television or in newspapers.”
“Makers from some countries make an effort by switching the steering wheel to the other side,” he said. “If there is a misunderstanding about this, I will of course explain it to the U.S. side.”
In 2015, Japan exported 1.6 million cars to the U.S., while fewer than 19,000 American cars were sold in Japan. Seko said the situation was the result of competition.
In his talks next month with Trump, Abe must consider whether, or how, to placate the new U.S. administration, something Japan has done at other times since the Second World War to maintain healthy ties with its main security ally. Hemmed in by a pacifist constitution and a non-nuclear pledge, Japan relies on the U.S. to provide a “nuclear umbrella” to protect it from regional threats, including its neighbour China.
The Japanese leader has signaled he’s open to a bilateral trade deal after Trump formally withdrew from a 12-nation Asia-Pacific accord last week in one of his first acts as president. One-on-one talks with the U.S. on trade are “not absolutely impossible,” Abe told lawmakers last week in Tokyo.
Any such talks could find a sticking point over cars. In 2013, then-Ford Motor Co. chief executive officer Alan Mulally called Japan “the most closed market in the world.” Toyota Motor Corp., which was criticized by Trump over its plans to build a plant in Mexico, has announced it will invest $600 million and add 400 jobs at an assembly plant in Indiana.