The White House has implemented the July U.S.–Japan trade deal, with President Donald Trump signing an executive order that lowers U.S. tariffs on Japanese automobiles and parts to 15% and caps most other Japanese imports at a baseline 15%. The order clarifies that the new reciprocal rate will not be “stacked” on top of higher existing tariffs for other categories.
The 15% auto rate will take effect once a follow-on Federal Register notice is published, and officials were instructed to issue that notice within seven days of the order’s publication. For most non-auto goods, the 15% framework is retroactive to August 7, with refunds due where excess duties were collected. Commercial aircraft and parts covered by the WTO civil aircraft agreement are excluded from the new duties.
Tokyo’s commitments mirror the tariff relief. Japan pledged to channel $550 billion into U.S. projects through equity, loans, and guarantees arranged by state-backed banks, increase annual purchases of U.S. farm goods by about $8 billion, and boost “minimum access” rice procurements by 75%. Japan will accept U.S.-manufactured, U.S.-safety-certified passenger vehicles for sale without additional testing, and agreed to purchase 100 Boeing jets alongside increased procurement of U.S. defense equipment.
A joint statement outlines work toward a new LNG offtake arrangement from Alaska and says the United States will ensure Japan gets the lowest tariff rates it offers any partner on pharmaceuticals and semiconductors. Automakers reacted cautiously positive. Toyota, which has warned of a near-$10 billion profit hit from earlier tariffs, said the framework “provides much-needed clarity,” noting that nearly 80% of vehicles it sells in the United States are already built in North America.
The new 15% rate is still six times the pre-April 2.5% U.S. MFN tariff, leaving smaller exporters like Mazda, Subaru and Mitsubishi more exposed than peers with larger North American footprints. Analysts expect continued price pressure in entry segments and potential model culls or deeper tie-ups if margins remain tight.
An accompanying memorandum structures the investment side of the deal so that cash flows from Japanese-funded projects are split 50/50 until an allocation threshold is reached, after which 90% flow to the United States. Projects will be selected by the U.S. government and are slated to focus on chips, metals, pharmaceuticals, energy and shipbuilding through January 2029.
In agriculture and energy, Japan committed to expand annual purchases, including the rice increase and broader buys of corn, soybeans, fertilizer and bioethanol, and is exploring an Alaskan LNG offtake as part of an annual roughly $7 billion energy component.
The order also codifies guardrails stating that goods already facing tariffs at or above 15% will not have the new 15% reciprocal rate added on top, and that agencies will issue rules to determine when a vehicle or part qualifies as a “product of Japan.”