US-Japan massive trade deal cuts auto tariffs to 15 percent, as President Donald Trump announced the agreement on Tuesday. The deal arrives just days before a threatened 25% tariff was set to take effect on August 1.
Trump made the announcement on his Truth Social platform. “We just completed a massive Deal with Japan,” he wrote. “Perhaps the largest Deal ever made.”
According to Trump, Japan will invest $550 billion into the United States under the agreement. He claimed America will receive 90% of the profits, although details were not disclosed. “This will create hundreds of thousands of jobs,” he said.
Japanese imports already faced a 10% duty. Without a deal, that rate would have jumped to 25% next month. Duties on Japanese autos—an industry tied to 8% of Japan’s jobs—were also already in place.
US-Japan massive trade deal cuts auto tariffs to 15 percent, as confirmed by Prime Minister Shigeru Ishiba on Wednesday in Tokyo. “We are the first to reduce tariffs on autos and parts, without volume limits,” he said.
Ishiba added that Japan secured the largest tariff reduction among nations with U.S. trade surpluses. Following the announcement, Japanese auto stocks surged. Toyota shares jumped over 12% by Wednesday’s close.
Auto exports to the U.S. had dropped sharply. In June alone, U.S.-bound shipments declined 26.7%, raising recession fears in Japan. Last year, vehicles made up 28% of Japan’s ¥21.3 trillion ($142 billion) exports to the U.S.
Meanwhile, Trump criticized Japan for its limited imports of American-made cars. Companies like General Motors sell only a few hundred vehicles annually in Japan, compared to millions of Japanese cars bought by U.S. consumers.
Trump also demanded that Japan import more rice, oil, and gas. On Tuesday, he said Japan agreed to open its market for rice, trucks, and other agricultural products.
Rice imports are politically sensitive in Japan. Previously, Ishiba’s government had ruled out concessions. But on Wednesday, Ishiba insisted the deal does not compromise Japan’s agriculture.
US-Japan massive trade deal cuts auto tariffs to 15 percent, boosting Trump’s push to finalize trade deals before his deadline. Earlier Tuesday, he also announced pacts with the Philippines and Indonesia.
The Philippines agreed to a 19% tariff on exports. Indonesia accepted a 19% rate—down from 32%—while relaxing critical mineral export rules. However, Indonesian goods rerouted to dodge tariffs will face a 40% duty.
Elsewhere, the U.S. and China agreed to ease tariffs after months of escalation. Talks will resume next week in Stockholm. Since January, Trump re-imposed a 10% blanket tariff on most imports, including harsher duties on steel, aluminum, and autos.
Although legal challenges continue, the White House appears committed to securing fast deals. Trump’s trade agenda is accelerating as his August 1 deadline approaches.
