Trump: "If you pay like Japan, tariffs can be lowered…a kind of seed money"

Korea Economic Daily

Summary

President Trump stated that Japan secured tariff reductions imposed by the U.S. by promising an investment of $550 billion in the United States.
President Trump referred to this type of deal as a 'signing bonus' or 'seed money', indicating that other countries could also receive tariff reductions if they invest.
Through the U.S.-Japan trade agreement, both mutual and auto tariff rates were reduced to 15%, and President Trump noted that similar negotiations are underway with the European Union and others.

Japan's $550 billion investment in the United States

"Market opening in Japan is more valuable"

U.S. President Donald Trump stated that other countries, if they make large investments in the United States like Japan, could have U.S.-imposed tariff rates reduced.

On the 24th (local time), at the Federal Reserve System building construction site in Washington, D.C., when asked, 'Can other countries also lower tariffs by paying?', Trump replied, "Yes. I would allow other countries to pay and buy it down." Trump's remarks were made while explaining to reporters about Japan's promised $550 billion investment in the U.S. as part of the U.S.-Japan trade agreement.

He emphasized that Japan's promised investment was not a loan, but a "signing bonus", and claimed that Japan paid this amount in advance. A 'signing bonus' refers to money paid upfront at the time of contract signing.

Trump said, "Japan gave us $550 billion, and tariffs were lowered slightly. Then Japan agreed to fully open its economy (market) to everyone. This was not easy."

He continued, "Market opening is more valuable than the $550 billion Japan paid. So, combining the market opening and the payment, we lowered (the tariff rate) to 15%. However, Japan's tariff rate was about 28%, and essentially, Japan purchased a tariff reduction."

Trump previously mentioned that Japan's original tariff rate was 28%. However, the tariff rate he notified to Japan in a letter sent on the 7th was 25%. Through the U.S.-Japan trade agreement, both the mutual tariff rate and the auto tariff rate were each reduced to 15%.

Before touring the construction site, Trump also told reporters that Japan's investment in the U.S. was "seed money". He further said, "Negotiations are also going pretty well with the European Union (EU). There are other countries too. All are very large deals, and our country will make tremendous amounts of money."

Subin Park, Hankyung.com Reporter waterbean@hankyung.com