- Trump unveils "massive" U.S.-Japan trade deal with 15% reciprocal tariffs and $550B Japanese investment.
- Auto tariffs cut from 25% to 15%; Japan to open markets for U.S. cars, rice, and other goods.
- Deal expected to create hundreds of thousands of jobs and boost LNG talks with Japan and Europe.
President Donald Trump announced a “massive” agreement with Japan that features “reciprocal” tariffs of 15% on the nation's exports to the U.S., with reports suggesting that auto duties will also be reduced to this level.
In a post on Truth Social, Trump referred to the deal as “perhaps the biggest Deal ever made,” while stating that Japan would invest $550 billion in the U.S. and the U.S. would “receive 90% of the Profits.”
Trump stated that Japan will “open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things.”
The U.S. president stated that the agreement would generate "Hundreds of Thousands of Jobs."
After Trump’s announcement, Japanese Prime Minister Shigeru Ishiba stated that auto tariffs on Tokyo will be reduced to 15%—down from the current 25% applied globally—as part of the agreement, according to Reuters. Auto exports to the U.S. are essential to Japan’s economy, representing 28.3% of total shipments in 2024, based on customs data.
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“A year ago, that level of tariffs [15%] would be shocking. Today, we breathe a sigh of relief,” Brian Jacobsen, chief economist at Annex Wealth Management, told CNBC.
Japanese automobile exports to the U.S. decreased by 26.7% in June, following a 24.7% drop in May. The nation's total exports to the U.S. — its second biggest trading partner — reached 10.3 trillion yen ($70.34 billion) from January to June, representing a 0.8% decline compared to the previous year.
In a speech after his Truth Social post, Trump mentioned that Japan and the U.S. were finalizing another agreement related to liquefied natural gas, “We have Europe coming in tomorrow, and the next day, we have some other ones coming in,” he added, without specifying any details.