US and Japan fail to reach trade deal at G-7 summit

Source Fxstreet

US President Donald Trump and Japanese Prime Minister Shigeru Ishiba failed to reach a trade agreement on the sidelines of the Group of Seven summit, per Bloomberg. Ishiba wants Trump to eliminate 25% duties on Japanese vehicles and 24% reciprocal levies on other Japanese imports, which have been suspended until July 9.

“There are still some points on which the two sides are not on the same page, so we have not yet reached an agreement on the trade package,” said Ishiba on Monday. 

Market reaction 

At the time of writing, the USD/JPY pair is trading 0.12% higher on the day at 144.90. 

Tariffs FAQs

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Silver Price dives below $50.00 as the Dollar rallies Market expectations that the US and China will de-escalate trade tensions are boosting the US Dollar’s recovery and hurting precious metals.
Author  FXStreet
11 hours ago
Market expectations that the US and China will de-escalate trade tensions are boosting the US Dollar’s recovery and hurting precious metals.
placeholder
Japan's next finance minister could unsettle yen bearsThe dollar briefly fell to around 150.50 yen on a local media report that Katayama will get the job, before recouped losses to climb above 151 yen.
Author  FXStreet
12 hours ago
The dollar briefly fell to around 150.50 yen on a local media report that Katayama will get the job, before recouped losses to climb above 151 yen.
placeholder
Bitcoin Price Forecast: BTC falls below $108,000 amid economic uncertainty, ETF outflowsBitcoin (BTC) price trades below $108,000 at the time on Tuesday, after facing rejection from a previously broken trendline, signaling renewed selling pressure.
Author  FXStreet
12 hours ago
Bitcoin (BTC) price trades below $108,000 at the time on Tuesday, after facing rejection from a previously broken trendline, signaling renewed selling pressure.
placeholder
Forex Today: Markets remain focused on US-China, government shutdown newsEarly Tuesday, the USD Index clings to small gains above 98.50 and US stock index futures lose about 0.1% on the day.
Author  FXStreet
14 hours ago
Early Tuesday, the USD Index clings to small gains above 98.50 and US stock index futures lose about 0.1% on the day.
placeholder
BitMine and Strategy Capitalize on Market Weakness to Expand Crypto PortfoliosAfter the October crash shook global markets, crypto assets continued their volatile run, with Bitcoin (BTC) and Ethereum (ETH) still below their pre-crash levels.
Author  Beincrypto
14 hours ago
After the October crash shook global markets, crypto assets continued their volatile run, with Bitcoin (BTC) and Ethereum (ETH) still below their pre-crash levels.
goTop
quote