Trump announces trade deal with Japan including 15 percent tariff
On Tuesday evening, U.S. President Donald Trump announced the conclusion of a new trade deal with Japan. The agreement includes a 15 percent tariff on Japanese goods imported into the United States and outlines plans for Japan to invest $550 billion in the U.S. economy. As part of the deal, Japan will also open its market to a range of American products, including passenger vehicles, rice, and agricultural goods.
Trump made the announcement on his social media platform Truth Social, referring to the outcome as a “massive deal” that will strengthen U.S.–Japan relations and create “hundreds of thousands of new jobs” in the United States. He emphasized the enduring nature of the partnership between the two countries.
While Trump did not specify tariff changes on Japanese automobiles—one of Japan’s key export categories—Japanese public broadcaster NHK reported that both countries agreed to reduce the previously proposed 25 percent tariff on Japanese car imports to 12.5 percent. Combined with the existing 2.5 percent tariff, this results in a final duty of 15 percent. Reuters confirmed the details through five separate sources.
The announcement marks the most notable agreement in a string of bilateral trade negotiations the U.S. has been pursuing in recent weeks. Earlier this month, Trump had threatened to impose 25 percent tariffs on imports from both Japan and South Korea unless new terms were reached by August 1.
Trade in goods between the U.S. and Japan amounted to nearly $230 billion last year, with Japan posting a $70 billion surplus. According to the U.S. Census Bureau, Japan ranks as the fifth-largest U.S. trading partner.
Japanese Prime Minister Shigeru Ishiba welcomed the agreement, stating that the final duty level was the most favorable among countries with trade surpluses with the U.S. However, Ishiba faces mounting political pressure following his coalition’s loss of its majority in the upper house in recent elections. Local media reports suggest he may announce his resignation before the end of August.
Japanese government envoy Ryosei Akazawa traveled to Washington on Monday to negotiate the final terms. Trump’s announcement followed Akazawa’s meetings at the White House and with U.S. Commerce Secretary Howard Lutnicko and Treasury Secretary Scott Bessent. After the talks concluded, Akazawa posted “#Mission completed” on social media.
The announcement had an immediate impact on financial markets. Japan’s Nikkei 225 index rose nearly four percent before market close. Shares in major Japanese automakers, including Toyota and Honda, recorded double-digit gains. The yen initially strengthened against the U.S. dollar but later weakened amid reports of Ishiba’s possible resignation.
Economists interviewed by Reuters noted that the 15 percent tariff represents a more favorable outcome for Japan than earlier scenarios threatened by the U.S. administration. The agreement, they said, could help Japan avoid slipping into a recession.
Source: Reuters
