The United States imposes 15% 'reciprocal' tariff on most Japanese goods
The new rate kicks in as the two countries remain at loggerheads over Japan's $550 billion investment pledge made as a part of the trade deal, when and if auto tariffs will be lowered, and even the terms and conditions of the reciprocal tariff.
Some analysts wonder if the agreement could collapse altogether.
The new reciprocal rate on Japanese goods — which is lower than the 25% that the U.S. threatened to impose but still five percentage points higher than the 10% in place since April — might be charged in addition to the existing duties, contrary to Japan's interpretation of the agreement.
U.S. President Donald Trump signed an executive order to modify the reciprocal tariff rates on over 60 countries and territories on July 31, with Syria getting hit with the highest rate — 41% — and a number of countries, including the United Kingdom, having the rate set at 10%, the lowest on the list. About half of the jurisdictions listed received a 15% rate.
The new rates took effect at 12:01 a.m. Thursday in Washington, 1:01 p.m. in Tokyo.
"IT'S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!" Trump wrote on Truth Social.
Discrepancies on how to implement the agreement — which was not put in writing — leaves some of the tariff measures still unclear.
Japan insists it secured a U.S. commitment that, for items with an existing tariff rate below 15%, the total duty including the reciprocal tariff will be capped at 15%. For items with an existing tariff above 15%, no additional tariff will be imposed.
That promise was absent from an executive order signed by the president on July 31, which shows only the European Union enjoying this more favorable calculation. White House officials confirmed to Japanese media on Wednesday that the Japanese rate will be determined as published and not by using the EU method that caps some rates at 15%.
'We have confirmed with the U.S. side that there are no discrepancies between Japan and the United States,' Chief Cabinet Secretary Yoshimasa Hayashi said of the new reciprocal tariff rate at a news conference in Tokyo on Thursday morning.
Also under the terms of the July 22 handshake agreement, Trump's tariffs on automobiles are to be cut in half from 25%, with the new total being 15% when a 2.5% levy independent of the Trump tariffs is included.
The White House has yet to announce when it will lower the duties on automobiles from the current 25%, and this has led to considerable concern in Tokyo.
Ryosei Akazawa, Japan's chief negotiator, flew to the U.S. on Tuesday for a ninth round of trade talks. He urged the U.S. administration to promptly lower the auto tariffs during a 90-minute meeting with U.S. Commerce Secretary Howard Lutnick.
Regarding the contradictory stances on how to implement the new reciprocal tariff, Akazawa told reporters before departing from Tokyo that the two sides share the understanding that the new rate on Japan is 'non-stacking,' in that the 15% won't just be added to existing rates.
The difference might be due to a clerical error and might not warrant further negotiations, he said.
The U.S. president has said in recent days that he will put new tariffs on a variety of foreign goods, including up to 250% on pharmaceutical products and 100% on semiconductors. A 50% duty on some copper products was put in place on Aug. 1.
Currently, Trump tariffs on Japan include a 25% duty on its vehicles and auto parts, 50% on steel and aluminum, and 15% reciprocal tariff on most of its other products.
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