U.S. President Donald Trump speaks during a joint press conference with Japanese Prime Minister Shigeru Ishiba in the East Room at the White House on February 07, 2025 in Washington, DC.
Andrew Harnik | Getty Images News | Getty Images
U.S. President Donald Trump on Tuesday stateside announced that he had made the “largest Deal ever” with Japan, that involves “reciprocal” tariffs of 15% on the country’s exports to the U.S.
In a post on Truth Social, Trump also said that Japan will invest $550 billion into the United States, adding that the U.S. will “receive 90% of the Profits.”
Trump said 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 added that the deal would create “Hundreds of Thousands of Jobs.”
Shortly after the announcement, Japan’s top trade negotiator, Ryosei Akazawa, posted about the deal on X, expressing “heartfelt thanks to everyone involved,” and “#Mission Accomplished,” according to a google translation of his remarks in Japanese.
Trump in a speech later said that Japan and the U.S. were also concluding an additional deal involving liquified natural gas, adding that “we have [a] Europe [deal] coming in tomorrow,” without specifying any details.
“A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief,” Brian Jacobsen, chief economist at Annex Wealth Management, told CNBC.
Japan’s public broadcaster NHK reported that auto tariffs on Tokyo will be lowered to 15% from the current 25% — levied across countries — citing a Japanese official. Auto exports to the U.S. are a cornerstone of Japan’s economy, making up 28.3% of all shipments in 2024, according to customs data.
Japanese exports of automobiles, which include cars, buses and trucks, to the U.S. fell 26.7% in June, extending May’s 24.7% plunge.
The country’s overall exports to the U.S. — its second largest trading partner — stood at 10.3 trillion yen ($70.34 billion) between January to June, a 0.8% year-on-year drop.
In his tariff letter sent to Japan earlier this month, Trump had threatened 25% levies on the country’s exports from Aug. 1, one percentage point higher from the 24% rate announced during his April 2 “Liberation Day” tariffs.
Tuesday’s announcement comes just days after Japanese Prime Minister Shigeru Ishiba’s governing coalition lost its majority in the country’s upper house elections that had raised worries of undermining the country’s negotiating position with the U.S.
HSBC said in a note Monday that “For Prime Minister Ishiba, a favourable U.S. trade deal could help stave off a no-confidence motion or internal challenge from the LDP [Liberal Democratic Party].”
Ishiba had said after the upper house loss that he would stay on as prime minister, but Japanese media outlet Yoimuri reported early Wednesday that he would decide whether to stay on his position after assessing the progress of the tariff negotiations, according to a Google translation of the report in Japanese.
