Donald Trump has hailed the US trade deal with Japan as the opening of Japan’s markets to the US “for the first time ever”, depicting it as a victory for his use of “tariff power” and envisioning a flood of US cars and agricultural products being shipped to Japan. The reality is likely to be somewhat less than he imagines.

The deal which, like the other US trade agreements struck recently, is more a framework than a finalised agreement, has set a 15 per cent tariff rate on Japan’s exports to the US.

Trump says the deal with Japan is a “big” win for the United States.Credit: Bloomberg

That’s less than the 25 per cent Trump had threatened but, while lower than the 19 per cent tariffs in recent agreements with Indonesia and the Philippines and the 20 per cent rate on Vietnam’s exports, is massively above the less-than-2 per cent average rate on Japan’s exports to the US that applied before he launched his trade wars.

It’s also less than the 25 per cent rate on imports of autos and auto parts from Mexico and Canada, which is why Japan – which has agreed to open its market to US autos, without applying its own safety standards – believes it has struck a good deal in the circumstances.

It will be shipping an uncapped volume of vehicles into the US that have been built with steel and aluminium not subject to Trump’s 50 per cent sectoral tariffs or his 25 per cent tariff on auto parts even as autos built at GM or Ford plants in Mexico and Canada, or with imported components, face much higher effective rates. The US car manufacturers are already crying foul.

Japan’s concession? In theory the US companies will be able to sell more cars to Japan, now a tiny market for them. The Japanese, however, are unlikely to buy what America has to sell.

US car companies have essentially vacated the market for the small cars Japanese prefer, focusing on large cars, SUVs and utes. The US imports most of its smaller vehicles.

While Japan might have preferred a deal at Trump’s 10 per cent........

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