Former U.S. President Donald Trump has announced a sweeping trade agreement with Japan, hailing it as a “massive” breakthrough just days before his August 1 deadline for imposing steep tariffs on major U.S. trading partners.
The deal, described by Trump on his Truth Social platform as “perhaps the largest ever made,” includes a $550 billion investment pledge from Japan into the U.S., with Washington expected to receive 90% of the profits — although the White House has yet to release full details of the arrangement.
With this agreement, Japan becomes the fifth country to sign a trade pact under Trump’s aggressive “90 deals in 90 days” campaign, joining the United Kingdom, Vietnam, Indonesia, and the Philippines.
“We just completed a massive Deal with Japan… [It] will create Hundreds of Thousands of Jobs,” Trump wrote.
Key Details of the Deal:
- Auto Tariffs Reduced: The 25% tariff on Japanese automobiles has been cut to 15%, sparking a rally in Japanese car stocks — Toyota and Mitsubishi shares rose by about 14%.
- Agricultural Concessions: Japan has agreed to increase U.S. rice imports, a sensitive issue domestically, although officials insisted this would not harm Japan’s agricultural sector.
- Steel & Aluminium Duties Stay: The 50% tariffs on Japanese steel and aluminium remain in place, despite calls for their removal.
- No Defence Spending Clause: Japanese officials clarified that defence-related obligations were not part of the deal.
Japanese Prime Minister Shigeru Ishiba called the agreement a win for both sides, saying it upheld Japan’s national interest while protecting key industries. However, local media speculated that Ishiba may step down soon following a disappointing performance in the recent upper house elections.
“We are the first country in the world to reduce tariffs on automobiles and auto parts, with no limits on volume,” Ishiba told reporters.
Unfinished Business
While Trump touted the Japan agreement as a model deal, major U.S. trade partners including China, Canada, Mexico, and the European Union remain at the negotiating table. Talks with China are set to resume in Stockholm next week, with temporary tariff freezes scheduled to expire on August 12.
Meanwhile, trade envoys in Washington continue finalizing terms with other nations as Trump seeks to dramatically overhaul the U.S. trade framework heading into a contentious election cycle.
The Japan deal is a key milestone in Trump’s economic agenda, which prioritizes aggressive bilateral trade reforms and punitive tariffs to force renegotiation of longstanding trade imbalances.
