Trump and Japan reach trade deal with tariff rate set at 15%
The agreement, touted by Mr Trump after securing breakthroughs in a final 75-minute Oval Office meeting Tuesday with Japan's top trade negotiator, spares the key US ally from a threatened 25 per cent tariff set to take effect next week and raises hope for other trade deals over the coming days.
'They had their top people here and we worked on it long and hard, and it's a great deal for everybody,' Mr Trump said at a White House event Tuesday evening.
Under the deal, Japanese automobiles and parts would be subjected to the same 15 per cent rate as other of the country's exports, according to a senior US administration official, speaking on condition of anonymity to outline the agreement. In return, Japan will accept cars and trucks built to US motor vehicle safety standards, without subjecting them to additional requirements – a potentially major step to selling more American-built vehicles in the country.
A centrepiece of the pact with Japan is the $550 billion pledge, which the official said was akin to a sovereign wealth fund under which Mr Trump himself could steer investments inside the US.
Final terms of the agreement still need to be enshrined in a formal proclamation. Legal particulars and other details surrounding the $550 billion investment pledge are still being hammered out, the official said.
The investment timeline is uncertain, and it is unclear whether Mr Trump could allocate the full sum during his term.
The source of the Japanese funding was also not immediately available. Japanese Prime Minister Shigeru Ishiba said the investment sum would reach as much as $550 billion and would partly come in the form of loan guarantees.
Mr Trump played the role of closer after eight rounds of negotiations, pressing for more concessions and securing better terms for the US in that final Oval Office meeting with Japan's chief trade negotiator, Ryosei Akazawa, the official said. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent joined in the final talks.
Mr Trump has a track record of making last-minute demands in talks, including before the US inked its agreement with the UK.
Previously, US and Japanese officials were said to be discussing a fund of around $400 billion, with profits equally split. But under the terms hashed out in the Oval Office meeting, Japan agreed to provide $550 billion to invest in projects in the United States that the president deems important, through vehicles returning 90 per cent of the profits to the US.
A photo shared by Mr Trump's aide Dan Scavino on social media shows the initial figure was $400 billion, which appears to have been crossed out by Mr Trump and replaced by a handwritten $500 billion, before they settled at $550 billion.
Japan has also agreed to buy 100 Boeing Co. aircraft, boost rice purchases by 75 per cent and buy $8 billion in agricultural and other products while hiking defence spending with American firms to $17 billion annually, from $14 billion, the senior official said.
The country will also participate in an LNG pipeline project in Alaska, the official said, an apparent reference to a long-stalled $44 billion venture designed to export the state's gas around the globe. Mr Trump told lawmakers at the White House Tuesday evening that Japan is 'forming a joint venture' on a proposed Alaskan LNG project. 'They're all set to make that deal now,' Mr Trump said.
'Japan and the US have been conducting close negotiations with our national interests on the line,' Ishiba said in Tokyo. 'The two nations will continue to work together to create jobs and good products.'
Mr Trump also pledged to give Japan a safety clause on forthcoming sectoral tariffs, including levies expected on semiconductors and pharmaceutical drugs – effectively agreeing to not treat the country worse than any other nation when it comes to those goods, the official said.
In effect, that means Japan will be guaranteed whatever the lowest global rate is on those tariffs. US negotiators have so far resisted efforts to make exceptions and carveouts for sectoral tariffs, though the UK deal included a plan for limited relief from levies on steel.
Shares in Japanese carmakers jumped in Tokyo on reports the auto sector rate would be lowered from 25 per cent to 15 per cent for Japan, with Toyota Motor Corp. rising more than 11 per cent.
Mr Trump has repeatedly zeroed in on auto trade as he criticises trade imbalances with the country. Around 80 per cent of Japan's trade surplus with the US is in cars and auto parts.
The yen fluctuated in early Tokyo trading, before strengthening again after the report from public broadcaster NHK on the auto tariffs. Japanese stocks on the Topix benchmark index rose, led by automakers, and US equity futures edged higher. – Bloomberg
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Independent
an hour ago
- Irish Independent
The Irish Independent's View: Ireland must proceed with caution after Donald Trump's threat of increased pharma tariffs
'We'll be putting an initially small tariff on pharmaceuticals, but in one year – one-and-a-half years, maximum – it's going to go to 150pc and then it's going to go to 250pc because we want pharmaceuticals made in our country,' Mr Trump warned. In his second coming, the US president has honed his superpower for wreaking economic havoc. Were he to write another book, it ought to be titled The Art of the Chaos. 'They [pharmaceutical companies] make a fortune with pharmaceuticals, and they make it in China and Ireland and everything else,' he said. The EU-US deal had already come in for severe criticism from countries including France and Germany for giving in too much and accepting higher tariffs. However, EU Commission officials defended it on the grounds that the agreement prevented an all-out trade war and also got Washington to roll back on a threat of pulling its security guarantees from Europe. The pact, signed by commission president Ursula von der Leyen, includes investment pledges and more purchases of US weapons and energy products. 'We chose the less bad option and we feel this is the better choice,' an EU official told the Financial Times. 'We're very clearly operating in a second-best world. Of course, America has its own problems, not least of which is the almost $1tn (€859bn) it must pay to service a national debt of $37tn. The Fiscal Advisory Council accused the Government of 'painting too rosy a picture' There is good reason why Ireland is the envy of Europe and a thorn in the side of the US president. Revenue figures have shown €156bn of corporate tax has flowed into the Exchequer in just 10 years. And we have just set a new record this year: according to the latest exchequer returns, tax receipts to the end of July came to €58bn. Earlier this summer, the Fiscal Advisory Council accused the Government of 'painting too rosy a picture' of future tax revenue in the context of framing a budget. It has also claimed that the Government has 'lost its anchor', with spending on a potentially unsustainable trajectory'. Finance Minister Paschal Donohoe is mindful of the risks and recognises that undue dependence on such eye-watering sums is hazardous. 'As I have said many times, we cannot assume these over-performances will continue indefinitely, particularly in the context of a deeply uncertain international trading environment,' he said. A cynic will tell you that he who remains calm while those around him panic probably doesn't know what's going on. The Coalition may not be hyperventilating just yet, at the threat of another transatlantic tariff thunderbolt, but a trimming of the sails and a checking of ambitions in terms of the budget must still inform their thinking.
Irish Independent
an hour ago
- Irish Independent
US college football game in Dublin expected to generate €130m for Irish economy
The Aer Lingus College Football Classic game between Kansas and Iowa State University will be held on Saturday, August 23, and has been described as the most competitive to take place on Irish soil. It is expecting to bring in 24,000 international visitors, mostly from the US. Grant Thornton's figures show three previous games held in Ireland brought €382m into the economy. The 2025 game will bring that figure up to €512m, it said. The game – which is expecting to attract viewership figures of 4.5 million when broadcast live on ESPN – is described as a high-profile opportunity to promote Irish culture by the Government. Tourism Minister Peter Burke said it will boost Ireland's tourism profile. 'Not only will the event generate significant revenue in August, the extensive coverage of the game in the USA will also put Ireland's vibrant tourism offering in the shop window for those planning a trip in the future,' he said. This series also delivers trade, tourism, business, community engagement and economic benefits A week-long run of business and political events are scheduled to take place, including an Irish-US CEO Club, where up to 450 senior executives will attend. In previous years, golf resorts around the country were among the big winners, as groups of visiting fans opted to extend their stays well beyond the day of the game. The match and the associated events are being supported by Tourism Ireland, Fáilte Ireland and Enterprise Ireland as part of a strategy to leverage international sporting events. 'The series has strongly positioned Ireland as a key overseas home for American football in Europe. Importantly, this series also delivers trade, tourism, business, community engagement and economic benefits,' junior culture minister Charlie McConalogue said. The title sponsor, Aer Lingus, says it is a valuable opportunity to increase transatlantic relations. 'The classic is a special event that celebrates sport, tradition, and transatlantic connection. We're proud to play a role in making these moments possible – connecting people, places, and possibilities through the power of sport,' Aer Lingus chief customer officer Susanne Carberry said.
Irish Independent
an hour ago
- Irish Independent
Trump and Putin set to meet as early as next week, US allies told
The announcement has raised hopes that an end to the conflict could be in sight after more than three years of intense fighting. After speaking by phone to the American president, Mr Zelensky said he believed Russia was 'now more inclined to a ceasefire'. The positive signs came during a day of intense diplomatic activity. Mr Trump's special envoy, Steve Witkoff, met in Moscow with Putin, the Russian president, for three hours. At the same time, Mr Trump intensified his pressure on Moscow with fresh sanctions and declared Russia to be an 'extraordinary threat' to the United States. Mr Trump said he would hit India with a further 25pc trade tariff over its purchase of Russian oil, a vital source of income for the Kremlin. In a call with European leaders, Mr Trump set out his plan to meet with Putin as soon as next week, according to the New York Times. The first meeting would include only Putin and Mr Trump, followed by sessions with Mr Zelensky, and would not include any of their European counterparts. The White House did not immediately respond to a request for more information about the meeting plans. 'My special envoy, Steve Witkoff, just had a highly productive meeting with Russian president Vladimir Putin,' he posted on Truth Social. ADVERTISEMENT 'Great progress was made! Afterwards, I updated some of our European allies.' At the same time, a senior administration official said secondary sanctions were still set to be imposed on countries trading with Russia tomorrow. 'The meeting with Russia and special envoy Witkoff went well,' the official said. 'The Russians are eager to continue engaging with the United States. The secondary sanctions are still expected to be implemented on Friday.' For his part, Mr Zelensky sounded an optimistic note. 'It seems that Russia is now more inclined to a ceasefire, the pressure on them is working,' he said. 'But the main thing is that they do not deceive us in detail, neither us nor the United States.' Yesterday brought a hectic slew of developments as Mr Trump continues to push for an unconditional, 30-day ceasefire, which would then pave the way for talks to establish a permanent peace deal. After Mr Witkoff met with Putin in Moscow, Mr Trump issued an executive order imposing tariffs on India and toughening his rhetoric on the threat from Moscow. 'I have received additional information from various senior officials on, among other things, the actions of the government of the Russian Federation with respect to the situation in Ukraine,' Mr Trump said. 'After considering this additional information, among other things, I find that … the actions and policies of the government of the Russian Federation continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.' The language marked a significant shift from earlier this year, when Mr Trump went out of his way to placate Putin in order to coax him to the negotiating table. It is not clear what the 'additional information' is and White House officials did not respond to requests for more details. 'I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil,' Mr Trump added in the executive order. Mr Trump had suggested that Mr Witkoff's meeting with Putin – their fifth – would determine any decision for the US president to follow through on threats to impose tariffs on countries buying Russian energy. India and China are among the countries buying the most Russian crude oil, which analysts say provides key revenues for Putin to fuel his war machine in Ukraine. A top Russian presidential aide described the talks as 'useful and constructive'. 'Russia had conveyed signals to the American side on the Ukrainian issue and received corresponding signals from Trump,' Yuri Ushakov told reporters after talks wrapped up. Bloomberg reported yesterday that the Kremlin might propose a moratorium on airstrikes by Russia and Ukraine. Although this would offer some relief to both sides, it would fall short of the full ceasefire that Ukraine and the US have been seeking for months. Andriy Yermak, chief of staff to Mr Zelensky, said that a full ceasefire and a leaders' summit were required. 'The war must stop and for now this is on Russia,' he said on Telegram. Since direct peace talks resumed in May, Russia launched its heaviest airstrikes of the war, while Ukraine has continued to target Russian refineries and oil depots. Meanwhile, Mr Zelensky accused Russia of deliberately striking a gas station to disrupt preparations for winter heating – an attack that Russia claims was targeting military-related infrastructure. Ukraine's energy ministry said the strike on the station near the Ukraine-Romania border was directed 'purely against civilian infrastructure' and targeting relations with Azerbaijan, the US and European partners. 'If the Russians are allowed to strike at our energy infrastructure and gas routes with impunity, then no infrastructure facility in Europe will be safe,' Ukraine's energy minister Svitlana Grinchuk said. 'Impunity only expands terror. That is why Russia must be held accountable for what it has done.'
