The issue of national security tariffs on imported automobiles is holding up the US-Japan trade deal. According to a recent report on Reuters, Japanese officials on the negotiations want assurance from the US government that it will not impose tariffs on automobiles and auto parts imported from Japan.

Markets were expecting Trump and Japanese PM Shinzo Abe to sign a limited trade deal this week on the sidelines of the UN General Assembly in New York. The interim trade deal was expected to offer greater access for US agricultural products in the Japanese markets.

However, there was no clarity on the issue of tariffs on cars and auto parts imported from Japan that Trump had previously threatened to impose. According to a report on The New York Times, Japan was insisting on a “sunset clause” which could lead to cancellation of any benefits on offer to the US side in case Trump decided to go ahead with tariffs on Japanese cars and auto parts.

Will this lead to a delay in the US-Japan trade deal?