Trump announces trade deal with Japan, including 15% tariff

WASHINGTON: US President Donald Trump on Tuesday (Jul 22) announced a trade deal with Japan that he said will result in Japan investing US$550 billion into the United States and paying a 15 per cent reciprocal tariff.

Trump had earlier this month said that the US would impose 25 per cent tariffs on Japan from Aug 1.

Japanese Prime Minister Shigeru Ishiba said Wednesday that he needed to examine the details of the trade deal before commenting.

"As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement," Ishiba told reporters in Tokyo after Trump's announcement.

"As the government, we think that (the deal) will protect national interests," he told reporters.

In a post on Truth Social, Trump said that Japan will open to trade for cars, trucks, rice and certain agricultural products, among other items.

"We just completed a massive deal with Japan, perhaps the largest deal ever made," he said.

"Japan will invest, at my direction, US$550 billion dollars into the United States, which will receive 90 per cent of the profits," Trump added.

"This deal will create hundreds of thousands of jobs - There has never been anything like it," he said.

"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."

The two countries have agreed to reduce additional tariffs on Japanese automobiles to 15 per cent from 25 per cent, Ishiba said on Wednesday.

"We agreed to halve the additional 25 per cent tariff rate imposed on cars and car parts since April to 15 per cent" which includes the 2.5 per cent previously in place, he said.

"We are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume," he told reporters, confirming Japanese media reports on the auto tariffs.

Following the news of the trade deal, Tokyo's Nikkei jumped more than 3 per cent.

Stocks in the crucial car sector rallied, with Mitsubishi soaring around 12 per cent and Nissan more than 9 per cent. Mazda Motor gained 17 per cent while Toyota Motor jumped 11 per cent.

The yen strengthened to 146.20 per dollar - compared with close to 148 on Tuesday. The unit had already enjoyed a recent tick-up after Ishiba vowed to remain in office despite a devastating weekend election loss.

Trump's announcement came as Ishiba's trade envoy Ryosei Akazawa was on his eighth trip to Washington where he met senior US officials.

After the deal was announced, Akazawa said on X: "Mission accomplished."

Ishiba aims to visit the US this month to meet with Trump if there is progress in the trade negotiations, Yomiuri newspaper reported on Wednesday.

Ishiba, however, is facing mounting opposition within his party over his decision to remain in office despite a bruising election defeat.