President Trump said Tuesday he has struck a “massive” trade deal with Japan that calls for 15% tariffs on goods the U.S. imports from there.
The president wrote on his Truth Social platform Tuesday that, as part of the agreement, Japan will invest $550 billion in the U.S. “which will receive 90% of the Profits.” He also said Japan will “open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products.”
The 15% tariff rate announced by Mr. Trump is lower than the 25% he proposed earlier this month and the 24% duties that were proposed on “Liberation Day” in early April.
“This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan,” Mr. Trump wrote.
“They had their top people here, and we worked on it long and hard, and it’s a great deal for everybody,” the president said of the negotiations with Japan, addressing GOP lawmakers Tuesday night during a White House reception.
Japan is the United States’ fifth-largest trading partner, according to federal statistics. Japan bought $79.7 billion worth of American goods last year, and the U.S. imported $148.2 billion worth of Japanese goods.
More than one-third of U.S. imports from Japan last year — or $52.3 billion — were cars and car parts, powered by Japan’s massive auto industry, according to federal data.
Duties of 25% percent on vehicles from Japan were also already in place under the tariff on foreign-made cars and parts rate Mr. Trump announced earlier this year, as were 50 percent levies on steel and aluminum.
Japanese Prime Minister Shigeru Ishiba said Wednesday the autos tariff will be lowered to 15%, which sent shares of Japanese automakers soaring.
“We are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume,” he told reporters.
“By protecting what needs to be protected, we continued the negotiations with an aim to reach an agreement that meets the national interest of both Japan and the United States,” Ishiba added. “In this agreement with President Trump, I think we were able to realize such an agreement.”
But Japan trade envoy Ryosei Akazawa said the 50 percent tariffs on steel and aluminum would stay in place.
Akazawa also said increased defense spending by Japan — something Mr. Trump has pressed for — was not part of the deal.
Mr. Trump also said Tuesday evening that his administration is working on a separate deal with Alaska involving liquified natural gas in the state.
Earlier Tuesday, Mr. Trump announced trade deals with Indonesia and the Philippines calling for 19% tariffs on those countries’ exports to the United States. The administration is still in talks with several other crucial trading partners, including Mexico, Canada and the European Union.
Trump pushing for last-minute trade deal blitz
Mr. Trump sent letters this month to about two dozen countries — including Japan — telling them to expect higher tariffs starting Aug. 1 unless they strike deals before then to resolve what the president views as unfair trade practices. The threats came near the end of a 90-day pause on most of the sweeping “reciprocal” tariffs Mr. Trump unveiled against dozens of countries on “Liberation Day” in April.
The Trump administration has hoped the letters will lead to a blitz of trade deals in the coming weeks, before the higher tariff rates kick in at the start of August. Commerce Secretary Howard Lutnick predicted Sunday that the next two weeks will be “for the record books.”
The letters have “gotten these countries to the table, and they are going to open their markets or they’re going to pay the tariff,” Lutnick said on CBS News’ “Face the Nation with Margaret Brennan.”
When the dust settles, Lutnick said, smaller countries can expect to face a roughly 10% tariff — which is the baseline rate imposed by Mr. Trump in April — while larger countries will likely face higher tariffs.
By comparison, the average tariff rate on U.S. imports in 2023 was around 2.5%, according to figures from the Yale Budget Lab.
Mr. Trump argues his tariff strategy is necessary to revive U.S. manufacturing, correct unfair trade practices and bring in additional government revenue. But many economists warn that tariffs can lead to higher inflation and lower economic growth.
Federal Reserve Chair Jerome Powell said earlier this month that the central bank has left interest rates relatively high so far this year because it is concerned Mr. Trump’s tariffs could push up consumer prices.
Lutnick responded to inflation worries Sunday by saying, “I think you’re going to see inflation stay right where it is,” and argued that tariffs will help American manufacturers.
“The idea that these importers are more important than the people who employ Americans, I think it’s just [the] wrong way of thinking about it,” Lutnick SAID.
Brian Dakss and
Olivia Rinaldi
contributed to this report.