President Donald Trump said on July 22 that the United States and Japan have reached a trade framework under which the U.S. will impose a 15 percent tariff on Japanese imports—down from the previously threatened 25 percent—and reduce auto and auto-parts duties.
In return, Japan will remove trade barriers on U.S. automobiles and agricultural products and provide up to $550 billion in investment, financing, and loans through government-affiliated Japanese financial institutions.
Japanese Prime Minister Shigeru Ishiba confirmed that auto tariffs will fall from 25 percent to 15 percent, a level he called “the lowest rate ever applied among countries that have a trade surplus with the U.S.”, while maintaining 50 percent levies on Japanese steel and aluminium.
Tokyo will also expand U.S. rice imports under existing WTO “minimum access” terms.
Markets responded positively: Japan’s Nikkei 225 rose nearly 4 percent and shares of automakers such as Toyota and Honda climbed between 11 percent and 14 percent.
Trump described the pact on social media as “the largest trade deal in history” and hinted at further agreements with other nations, including the EU.