World

Trump announces tariff deal with Japan

Jul 25, 2025 United States

The US President announced a "massive" trade agreement with Japan, setting reciprocal tariffs of 15% on Japanese exports to the US. The deal includes auto tariffs at the same level

After months of fruitless negotiations, the US and Japan have reached a trade agreement which the former is promoting as the deal of the century. The deal includes a 15% reciprocal tariff on most Japanese goods exported to the United States, with 50% tariffs on steel and aluminium remaining unchanged.

However, more importantly for Japan, the tariff is also applied to automobiles and car parts. This gives the country an advantage over other major vehicle exporters, which have faced a 25% levy on automotive exports since April.

According to Ryosei Akazawa, who was negotiating tariffs for Japan, the country is “the first in the world to be able to reduce tariffs on automobiles and auto parts without volume restrictions”. Prime Minister Shigeru Ishiba later noted in Tokyo that the 15% reciprocal tariff was the best rate achieved by a country with a trade surplus.

“This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%,” Trump had posted earlier on Truth Social.

As part of the agreement, Japan will also invest 550 billion US dollars in the United States in the form of equity and loans to support investments by Japanese businesses in key sectors such as pharmaceuticals and semiconductors. Trump said that the US “would receive 90% of the profits”.

Image Credits: liveindex.org

United States Economy International Trade Tariffs Trade agreements Trump tariffs