President Trump unveils major trade pact with Japan involving tariffs and massive investments.
The agreement boosts U.S. exports, raises import duties, and promises new jobs across key sectors.
United States President Donald Trump has announced what he called a “massive” new trade agreement with Japan, signaling a significant shift in economic relations between the two allies. The deal, unveiled on Tuesday after months of tense negotiations, will see Japanese exports to the US subjected to a 15 percent tariff, while Japan will invest a staggering $550 billion in the American economy.
Speaking via his Truth Social platform, Trump described the pact as “perhaps the largest Deal ever made,” asserting that the United States will receive 90 percent of the profits from Japan’s pledged investment.
In return, Japan will open its markets to more US exports, particularly in the automotive and agricultural sectors, including rice and select farm products. Trump claimed the deal would create “hundreds of thousands of jobs,” calling it a “great deal for everybody.”
“There has never been anything like it,” the president wrote. “It’s a lot different from the deals in the past, I can tell you that.”
Until now, Japanese goods had been subject to a baseline tariff of 10 percent under Trump’s trade policies. The new agreement raises that to 15 percent and averted a steeper 25 percent tariff that would have taken effect on August 1 had a deal not been reached.
While Trump did not address previous tariff threats, such as the 25 percent tariff on cars or the 50 percent tariff on steel and aluminum, Japanese broadcaster NHK confirmed on Wednesday that the new tariff rate on automobile exports will indeed be capped at 15 percent.
US Treasury Secretary Scott Bessent praised the agreement as “historic,” noting that it marks a new phase in U.S.-Japan relations. “I am happy to reaffirm our commitment to deepening this longstanding alliance and building the next chapter of US-Japan cooperation as we enter a new Golden Age under President Trump,” Bessent posted on X (formerly Twitter).
Though the Japanese government has yet to issue an official statement, Tokyo’s markets responded positively to the news. Japan’s benchmark Nikkei 225 index rose by nearly 2 percent in early trading on Wednesday, reflecting investor optimism about the new trade terms.
The deal is one of the most significant trade moves in Trump’s second term, following earlier announcements of preliminary agreements with the United Kingdom, Indonesia, Vietnam, and the Philippines, as well as a 90-day truce in ongoing trade talks with China.
Japan, the world’s fourth-largest economy, remains a key US trading partner. In 2024, the United States imported $148.2 billion worth of goods from Japan and exported $79.7 billion in return, according to the US Census Bureau.
