Trump and Abe announce initial trade deal details

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe announced initial details of an emerging trade deal between the two countries on Wednesday, with Trump saying it would open up Japanese markets to $7 billion worth of U.S. products.

Trump, using the threat of tariffs, has sought a comprehensive trade deal to scale back the U.S. trade deficit with Japan and to benefit American farmers – a key base of political support. Hanging over the negotiations has been Trump’s November 17 deadline to decide whether to go ahead with stiff punitive duties on car imports from Japan, as well as from the European union.

Last year, the total U.S. trade deficit with Japan was $58 billion, and Japan exported $51 billion worth of cars to the American market, according to government data.

American farmers and ranchers are eager for a trade deal as they are highly dependent on export markets.

Japan is the U.S.'s third largest agricultural export market, and Japanese consumers bought a quarter of American beef and pork exports last year -- $1.6 billion in pork and more than $2 billion worth of US beef.

Trump, at a signing ceremony with Abe on the sidelines of the United Nations General Assembly, said the deal's first phase would cover $40 billion worth of digital trade between the world's first and third-largest economies. Negotiators for the two sides would continue talks, Trump added.