The US and Japan have reached an agreement on a new trade package, but significant disagreements have arisen regarding profit distribution from the deal.
Partnership Worth $550 Billion
According to the new agreement signed on Tuesday, both countries agreed to economic cooperation amounting to $550 billion, including tariffs and joint investments.
Disagreements Over Profit Sharing
Japan insists that profit-sharing must reflect the proportional contributions and risk exposure of each side. Meanwhile, US officials state that Washington should retain 90% of the profits due to its 'larger economic role.' Lead Japanese trade negotiator, Ryosei Akazawa, noted that the US proposal for a 90-10 revenue split is not necessarily a 'final decision.'
Criticism of the Agreement by American Automakers
American automakers, such as General Motors, Ford, and Stellantis, have expressed concerns over the terms of the agreement, particularly regarding the tariff structure on vehicles and raw materials. Matt Blunt, president of the American Automotive Policy Council, warned of potential uneven competition for US companies under the agreement.
The disagreements between the US and Japan regarding profit allocation pose a risk to the new $550 billion trade and investment agreement. This issue reflects broader implications that could affect the stability of economic relations between the two countries.
