Trump announces Japan trade deal, cutting a threatened 25% tariff to 15% just before the August 1 deadline. This move follows weeks of pressure on Tokyo to comply with U.S. trade demands.
On Tuesday, the president revealed the agreement on his Truth Social account, calling it “perhaps the largest Deal ever made.”
He claimed Japan would invest $550 billion in the United States, with America receiving 90% of the profits. However, he did not provide further details on this investment structure.
According to Trump, the deal will create “Hundreds of Thousands of Jobs,” though he did not offer supporting figures.
Without the agreement, tariffs on Japanese goods—including autos—would have increased from 10% to 25%. The existing 25% duties on Japanese autos, steel, and aluminum already weigh heavily on Japan’s economy, where autos support 8% of jobs.
Japanese Prime Minister Shigeru Ishiba confirmed the auto tariff cut to 15% during a press conference in Tokyo. “We are the first country to reduce auto tariffs without volume limits,” he said. He described the outcome as a major achievement for Japan.
Following the announcement, auto stocks in Japan surged. Toyota jumped more than 12%, while other manufacturers also saw strong gains.
Despite the market reaction, concerns linger. Shipments of Japanese cars to the U.S. fell 26.7% in June, raising fears of an economic downturn. Automobiles accounted for 28% of Japan’s $142 billion in exports to the U.S. last year.
Meanwhile, U.S. automakers continue to struggle in Japan, selling only a few hundred vehicles annually compared to millions of Toyotas in the American market.
In addition to lowering auto tariffs, Trump announces Japan trade deal provisions on agriculture. He said Japan agreed to increase imports of U.S. rice and other farm products.
Rice remains a politically sensitive issue in Japan. Ishiba’s administration had previously ruled out concessions, but he now insists the new deal protects domestic farmers.
The president also revealed trade agreements with the Philippines and Indonesia. Both deals include tariff reductions and increased market access for American exports.
Talks with China are ongoing. Both countries recently agreed to temporarily reduce tariffs. Another round of negotiations is expected next week in Stockholm.
Since his return to the White House, Trump has imposed a sweeping 10% tariff on global imports, alongside sector-specific increases.
Legal challenges to these broad tariffs continue. Nevertheless, Trump announces Japan trade deal as a key pillar of his evolving trade strategy.
