UNITED NATIONS/WASHINGTON: A US-Japan trade deal hit a last-minute snag as Japanese officials sought assurances that the Trump administration will not impose national security tariffs on Japanese-built cars and auto parts, people familiar with the talks said on Monday.
US President Donald Trump and Japanese Prime Minister Shinzo Abe have been aiming to sign a trade deal at a meeting this week during the United Nations General Assembly in New York that provides increased access to Japan for US agricultural goods and bilateral cuts in industrial goods tariffs.
But the limited trade deal is not expected to include changes to tariffs and trade rules governing autos, the biggest source of the $67.6 billion US trade deficit with Japan.
Trump has refrained thus far from following through on his threat to impose tariffs of up to 25 percent on Japanese and European car and parts imports, citing ongoing trade negotiations with these partners.
The New York Times earlier reported that Japan was demanding a “sunset clause” that would cancel any trade benefits for the United States if Trump imposes the auto tariffs on Japanese vehicles.
Japanese Foreign Ministry spokesman Masato Ohtaka said that Japan still hoped to sign the US trade deal by the end of September and that there was still time to work out remaining issues.
“Frankly speaking, we still have some time and all my colleagues in the government are making their best efforts to actually meet this target,” Ohtaka said.
Japanese Chief Cabinet Secretary Yoshihide Suga, speaking in Tokyo, told a news conference: “With the UN General Assembly meeting in mind, we are accelerating the remaining work, including the wording of a trade agreement.”
Executives at two automakers briefed on the matter said Japan has expressed concerns about signing a deal without assurances that Trump will refrain from imposing tariffs on Japanese automotive exports as he benefits from Japanese agricultural concessions.
These people, speaking on condition of anonymity, confirmed that the issue could delay the signing of a US-Japan trade deal until subsequent weeks.
Japanese Foreign Minister Toshimitsu Motegi told reporters after talks with US Trade Representative Robert Lighthizer that significant work was under way to finalize the deal but that he did not expect much delay beyond an end-September target signing off on the deal. He added he expected a “good ceremony” when Abe and Trump meet.
Asked about the US threat of added tariffs on Japanese autos, Motegi said: “I think the content will not be something to worry about.”
Details of the US-Japan trade deal have not been disclosed, but people familiar with it say that it will provide US farmers who have been battered by the US trade war with China some relief through increased access to Japan, including for American beef and pork.
But some people say it will provide less than the access they would have received had the United States remained in the Trans-Pacific Partnership trade deal, which Trump pulled the United States out of on his third day in office in January 2017.
The deal also includes a modernization of digital trade rules, which is expected to reinforce the US model of Internet development, prohibiting cross-border taxation of e-commerce and data localization requirements.
Trump and Abe a year ago at the UN General Assembly agreed to discuss an arrangement that protects Japanese automakers from further tariffs while negotiations are under way.
The trade deal would not require congressional approval, using a trade law provision that allows the US president to make executive agreements to mutually reduce tariffs with a foreign trading partner.
US-Japan trade deal hits snag as Tokyo seeks assurances on car tariffs
US-Japan trade deal hits snag as Tokyo seeks assurances on car tariffs
- The limited trade deal is not expected to include changes to tariffs and trade rules governing autos
- That is the biggest source of the $67.6 billion US trade deficit with Japan
Saudi Arabia’s debt capital market to hit $600bn by end-2026, up 15% Fitch says
RIYADH: Saudi Arabia’s debt capital market is expected to reach $600 billion in outstanding issuance by the end of 2026, cementing its position as the largest US dollar debt and sukuk issuer among emerging markets.
In a report published this week, Fitch Ratings said outstanding Saudi debt surpassed $520 billion in 2025, an annual increase of 21 percent, with sukuk — Shariah-compliant financial instruments — accounting for roughly 62 percent of the total.
The steady momentum in Saudi Arabia’s sukuk market highlights the broader expansion of the Kingdom’s debt markets, as domestic and international investors seek diversification and stable returns.
Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings, said: “Driven by cross-sector financing needs, fiscal deficits, regulatory initiatives, and expected lower oil prices and interest rates, Saudi Arabia’s DCM is likely to reach $600 billion outstanding in 2026.”
He added: “Almost all Fitch-rated Saudi sukuk are investment grade, with issuers on Stable Outlooks and no defaults. Following reforms, foreign investors now contribute more than 10 percent of the government’s outstanding direct domestic issuance in primary local markets at end-2025.”
In 2025, the Kingdom’s dollar debt issuance surged by 49 percent to around $100 billion, with sukuk growth outpacing bonds.
In emerging markets excluding China, Saudi Arabia was both the largest dollar-debt issuer in 2025, with an 18 percent share, and the largest environmental, social and governance dollar-debt issuer, with more than a 26 percent share.
“Subordinated sukuk issuances by banks are rising. Access to the Saudi riyal and dollar markets is bringing benefits amid tighter riyal liquidity. This is supported by no additional currency risk, and established access to foreign investors,” said Fitch.
It added that Saudi Arabia’s annual borrowing plan, approved by the National Debt Management Center, aims to source up to 50 percent of sovereign funding needs from private markets, 25 percent to 30 percent from international debt capital markets, and 20 percent to 30 percent from domestic debt capital markets.
The report further noted that private funding channels, syndicated financing and certificates of deposit for banks are expected to remain among the prominent alternative funding sources in Saudi Arabia.
Fitch, however, cautioned that Saudi Arabia’s DCM is exposed to oil price sensitivity, interest rate volatility, evolving Shariah requirements for sukuk, and geopolitical risks, which could affect fiscal balances, funding costs and investor sentiment.
Earlier this month, a separate report by Fitch Ratings revealed that global sukuk issuances reached $300 billion in 2025, representing a 25 percent increase compared to the previous year, driven by steady offerings in Gulf Cooperation Council countries.
The report added that this growth momentum is likely to continue in 2026, supported by funding diversification efforts, upcoming maturities and refinancing activity across sovereigns, banks and corporates.
