US President Donald Trump and Japanese Prime Minister Shigeru Ishiba failed to reach a commercial agreement outside the summit of the seven group, according to Bloomberg. Ishiba wants Trump to eliminate 25% tariffs on Japanese vehicles and reciprocal taxes of 24% on other Japanese imports, which have been suspended until July 9.
“There are still some points where both parties do not agree, so we have not yet reached an agreement on the commercial package,” Istiba said Monday.
Market reaction
At the time of writing, the USD/JPY torque quotes 0.12% higher in the day at 144.90.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
