President Donald Trump said he had reached an “initial” deal on tariff barriers with Japan, potentially clearing the way for a resolution of the trade stand-off between Washington and Tokyo.

Mr Trump made the announcement in a statement to Congress on Monday night, but did not offer details. The agreement being negotiated between the two countries would offer US agricultural producers, who have been hit hard by the trade war with China, improved access to the Japanese market, in line with terms of the TPP trade deal with a group of Pacific nations that Mr Trump abandoned in early 2017.

In turn, the US was expected to lower tariffs on some industrial goods. The US and Japan also entered into an “executive agreement” on digital trade, Mr Trump wrote.

Mr Trump said he intended to “enter” into the agreement “in the coming weeks”, which could allow for it be signed on the sidelines of the UN General Assembly, where he is expected to meet Shinzo Abe, Japanese prime minister.

However, the deal falls short of a comprehensive agreement that would include service industries and many manufacturing goods. It was unclear from Mr Trump’s statement whether the interim deal would address the automotive sector, which has been a sore point between the countries.

Japan has been pushing for immunity from national security tariffs on cars and car parts being considered by the Trump administration, but the US administration has been reluctant to make such a concession. 

READ ALSO  Amazon to pay employee bonus amid threat of Black Friday strikes

Mr Trump said his administration was looking forward to more talks with Japan to “achieve a comprehensive trade agreement that results in more fair and reciprocal trade between the US and Japan”, though some analysts have been sceptical that Tokyo would want to negotiate a deeper deal. 

Depending on the details, the partial deal — often described as an “early harvest” — would allow Mr Trump to offer a win to US farmers who have grown increasingly frustrated with his trade policies.

Many US agricultural producers had been losing market share to rivals from the EU and other Pacific nations as their separate deals with Japan have gone into effect.

Via Financial Times