
Trump announces 'massive' Japan trade deal including 15% tariff
The two countries have been locked in negotiations for months since Trump launched his global trade offensive, with levies targeting steel and automobiles -- both important Japanese exports -- seen as particular sticking points.
Trump had previously threatened Japan, a major US trading partner, with a tariff of 25 percent beginning August 1 if a deal was not reached.
"We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump announced on his Truth Social platform.
He said that under the deal, "Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits."
He did not provide further details on the unusual investment plan, but claimed the deal "will create Hundreds of Thousands of Jobs."
Japanese Prime Minister Shigeru Ishiba said that he needed to examine the 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 in Washington.
- Rice imports? -
Japan has agreed to "open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things," Trump said.
Rice imports are a sensitive issue in Japan, and Ishiba's government had previously ruled out any concessions on the topic.
Japan's Nikkei index bounced over one percent on news of the deal, with Japanese auto stocks rising six percent.
The deal comes after Ishiba faced a bruising weekend election that left his coalition without a majority in the upper house.
Trump has been under pressure to wrap up trade pacts after promising a flurry of deals ahead of his August 1 tariff deadline.
Earlier on Tuesday, he announced a deal had been reached with the Philippines which would see the country face 19 percent tariffs on its exports.
The White House also laid out details of a deal with Indonesia, which would see it ease critical mineral export restrictions and also face a 19 percent tariff.
Similar agreements have been struck with the United Kingdom and Vietnam, while negotiations are ongoing with the top three largest US trading partners, China, Canada and Mexico.
After an escalatory tit-for-tat with Beijing, the two major economies agreed to a temporary lowering of tariffs, with another round of negotiations expected next week in Stockholm.
Since returning to the White House in January, Trump has imposed a sweeping 10 percent tariff on allies and competitors alike, alongside steeper levels on steel, aluminum and autos.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Bangkok Post
an hour ago
- Bangkok Post
USAID finds no signs of massive Hamas aid theft
An internal US government analysis found no evidence of systematic theft by the Palestinian militant group Hamas of US-funded humanitarian supplies, challenging the main rationale that Israel and the US give for backing a new armed private aid operation. The analysis, which has not been previously reported, was conducted by a bureau within the US Agency for International Development and completed in late June. It examined 156 incidents of theft or loss of US-funded supplies reported by US aid partner organisations between October 2023 and this May. It found 'no reports alleging Hamas' benefited from US-funded supplies, according to a slide presentation of the findings seen by Reuters. A State Department spokesperson disputed the findings, saying there is video evidence of Hamas looting aid, but provided no such videos. The spokesperson also accused traditional humanitarian groups of covering up 'aid corruption.' The findings were shared with the USAID's inspector general's office and State Department officials involved in Middle East policy, said two sources familiar with the matter, and come as dire food shortages deepen in the devastated enclave. Israel says it is committed to allowing in aid but must control it to prevent it from being stolen by Hamas, which it blames for the crisis. The UN World Food Programme says nearly a quarter of Gaza's 2.1 million Palestinians face famine-like conditions, thousands are suffering acute malnutrition, and the World Health Organization and doctors in the enclave reportstarvation deaths of children and others. The UN also estimates that Israeli forces have killed more than 1,000 people seeking food supplies, the majority near the militarised distribution sites of the Gaza Humanitarian Foundation (GHF), the new private aid group that uses a for-profit US logistics firm run by a former CIA officer and armed US military veterans. The study was conducted by the Bureau of Humanitarian Assistance (BHA) of USAID, which was the largest funder of assistance to Gaza before the Trump administration froze all US foreign aid in January, terminating thousands of programmes. It has also begun dismantling USAID, whose functions have been folded into the State Department. The analysis found that at least 44 of the 156 incidents where aid supplies were reported stolen or lost were 'either directly or indirectly' due to Israeli military actions, according to the briefing slides. Israel's military did not respond to questions about those findings. The study noted a limitation: becausePalestinians who receive aid cannot be vetted, it was possible that US-funded supplies went to administrative officials of Hamas, the Islamist rulers of Gaza. One source familiar with the study also cautioned that the absence of reports of widespread aid diversion by Hamas 'does not mean that diversion has not occurred'. The war in Gaza began after Hamas attacked Israel in October 2023, killing 1,200 people and capturing 251 hostages, according to Israeli tallies. Nearly 60,000 Palestinians have been killed since the Israeli assault began, according to Palestinian health officials. Israel, which controls access to Gaza, has said that Hamas steals food supplies from UN and other organisations to use to control the civilian population and boost its finances, including by jacking up the prices of the goods and reselling them to civilians. Asked about the USAID report, the Israeli military said that its allegations are based on intelligence reports that Hamas militants seized cargoes by 'both covertly and overtly' embedding themselves on aid trucks. Those reports also show that Hamas has diverted up to 25% of aid supplies to its fighters or sold them to civilians, the Israeli military said, adding that GHF has ended the militants' control of aid by distributing it directly to civilians. Hamas denies the allegations. A Hamassecurity official said that Israel has killed more than 800 Hamas-affiliated police and security guards trying to protect aid vehicles and convoy routes. Their missions were coordinated with the UN. Reuters could not independently verify the claims by Hamas and Israel, which has not made public proof that the militants have systematically stolen aid. GHF also accuses Hamas of massive aid theft in defending its distribution model. The UN and other groups have rejected calls by GHF, Israel and the US to cooperate with the foundation, saying it violates international humanitarian principles of neutrality. In response to a request for comment, GHF referred Reuters to a July 2 Washington Post article that quoted an unidentified Gazan and anonymous Israeli officials as saying Hamas profited from the sales and taxing of pilfered humanitarian aid. The 156 reports of theft or losses of supplies reviewed by BHA were filed by UN agencies and other humanitarian groups working in Gaza as a condition of receiving US aid funds. The second source familiar with the matter said that after receiving reports of US-funded aid thefts or losses, USAID staff followed up with partner organisations to try to determine if there was Hamas involvement. Those organisations also would 'redirect or pause' aid distributions if they learned that Hamas was in the vicinity, the source said. Aid organisations working in Gaza are also required to vet their personnel, sub-contractors and suppliers for ties to extremist groups before receiving US funds, a condition that the State Department waived in approving US$30 million (970.9 million baht) for GHF last month. The slide presentation noted that USAID partners tended to over-report aid diversion and theft by groups sanctioned or designated by the US as foreign terrorist organisations — such as Hamas and Palestinian Islamic Jihad — because they want to avoid losing US funding. Of the 156 incidents of loss or theft reported, 63 were attributed to unknown perpetrators, 35 to armed actors, 25 to unarmed people, 11 directly to Israeli military action, 11 to corrupt subcontractors, five to aid group personnel 'engaging in corrupt activities', and six to 'others', a category that accounted for 'commodities stolen in unknown circumstances', according to the slide presentation. The armed actors 'included gangs and other miscellaneous individuals who may have had weapons', said a slide. Another slide said 'a review of all 156 incidents found no affiliations with' US-designated foreign terrorist organisations, of which Hamas is one. 'The majority of incidents could not be definitively attributed to a specific actor,' said another slide. 'Partners often largely discovered the commodities had been stolen in transit without identifying the perpetrator.' It is possible there were classified intelligence reports on Hamas aid thefts, but BHA staff lost access to classified systems in the dismantlement of USAID, said a slide. However, a source familiar with US intelligence assessments said that they knew of no US intelligence reports detailing Hamas aid diversions and that Washington was relying on Israeli reports. The BHA analysis found that the Israeli military 'directly or indirectly caused' a total of 44 incidents in which US-funded aid was lost or stolen. Those included the 11 attributed to direct Israeli military actions, such as airstrikes or orders to Palestinians to evacuate areas of the war-torn enclave. Losses indirectly attributed to Israeli military included cases where they compelled aid groups to use delivery routes with high risks of theft or looting, ignoring requests for alternative routes, the analysis said. Reuters

Bangkok Post
9 hours ago
- Bangkok Post
All eyes on Trump's August 1 deadline
As global markets continue to digest US President Donald Trump's latest trade announcements, attention now turns to the rapidly approaching Aug 1 deadline that could reshape Southeast Asia's economic landscape. While recent bilateral deals have provided some clarity, Thailand faces the dual challenge of securing favourable trade terms with the US while managing an unexpected military escalation with Cambodia. Trump's tariff template The MSCI World Index of equities has continued its upward trajectory following Trump's announcement of new trade agreements that appear to establish a regional framework. Japan secured a 15% tariff rate (down from 24%), while the Philippines and Indonesia both achieved 19% rates, down from 20% and 32% respectively. These developments, combined with Vietnam's earlier 20% agreement, suggest Southeast Asian nations may face similar tariff levels. The US-Japan deal, which Trump dubbed "the largest trade deal in history", reveals the administration's negotiating blueprint. Japan's commitment to establish a $550-billion US investment fund, alongside promises to purchase 100 Boeing aircraft and billions of dollars' worth of defence equipment annually, demonstrates the scale of concessions required to secure preferential rates. However, the agreement has drawn sharp criticism from US automotive manufacturers, who argue that reducing tariffs on Japanese cars fails to address the core trade imbalance while disadvantaging American producers. With automobiles and auto parts comprising 80% of the US-Japan trade gap, industry representatives question whether the deal serves American interests. EU prepares for trade war Meanwhile, the European Union is preparing its most powerful trade retaliation tool -- the Anti-Coercion Instrument -- should Trump proceed with 30% tariffs on European goods. The EU outlined counter-tariffs on $117 billion worth of American products, including Boeing aircraft, automobiles and bourbon whiskey, signalling that trade tensions could escalate beyond Asia. European officials have indicated a willingness to accept 15% tariffs on most goods, while negotiating to keep rates on steel and aluminium at current levels, though these products may still face 50% duties. AI and monetary policy Adding to the complex global landscape, Trump signed executive orders launching his "AI Action Plan", aimed at maintaining American technological leadership through deregulation and energy infrastructure expansion. The plan emphasises federal standardisation over state-by-state regulation, while strengthening export controls to counter Chinese artificial intelligence development. On monetary policy, Trump's unprecedented visit on Thursday to the Federal Reserve -- the first presidential visit in nearly two decades -- highlighted ongoing tensions with chairman Jerome Powell over both interest rate policy and the central bank's building renovation costs. Despite public disagreements, Trump indicated he would not remove Powell over cost overruns, while continuing to pressure for rate cuts. Precarious position For Thailand, the stakes could not be higher. Without a successful trade negotiation with the US, the kingdom faces a punitive 36% tariff rate -- among the highest proposed -- creating a significant competitive disadvantage against regional peers. This cost differential of 10 to 16 percentage points compared with Vietnam (20%) and Malaysia (25%) could prompt foreign investors to relocate production bases. Finance Minister Pichai Chunhavajira's confidence in securing competitive rates reflects the urgency of Thailand's situation. The country may need to consider sacrificing protection for certain sectors to achieve an agreement that benefits the broader economy. Cambodian conflict Thailand's trade negotiations have been complicated by an unexpected military confrontation with Cambodia. Following a Cambodian artillery attack on Thai territory, Thailand responded by deploying F-16 fighter jets to strike Cambodian firing positions, leading to a temporary 0.58% decline in the SET index. While the immediate market impact appears limited -- Cambodia represents only 3% of Thailand's total exports -- the conflict could affect specific industries dependent on the Cambodian market, particularly energy products and consumer goods including beverages and fertilisers. For Cambodia, the economic consequences are far more severe, with potential losses including worker remittances worth 6.6% of GDP and shortages of essential goods including refined oil, fertilisers and food products. Market implications InnovestX analysis suggests limited impact on major Thai stocks, as most SET50/SET100 companies have minimal Cambodian exposure. However, stocks with significant Cambodian revenue face higher risks, including Samart Aviation Solutions (SAV) with 100% exposure, Carabao Group (CBG) at 14% and the consumer finance firm Aeon Thana Sinsap (AEONTS) with 7%. We maintain a cautious outlook, noting Thailand's structural disadvantage when it comes to trade requires urgent diplomatic resolution before the Aug 1 deadline. In the longer term, Thailand must diversify its trade relationships and accelerate free trade agreement negotiations with other regions to reduce dependence on the US market. Investment strategy In this environment of heightened volatility, investors are advised to maintain diversified portfolios across defensive stocks, government bonds, commodities including gold, and alternative assets. The Thai stock market is expected to consolidate while awaiting new catalysts and monitoring trade negotiation progress. As the Aug 1 deadline approaches, Thailand's ability to navigate both trade negotiations and regional security challenges will prove crucial for maintaining investor confidence and economic stability. The coming weeks will determine whether the kingdom can secure terms that preserve its competitive position in an increasingly fragmented global economy.

Bangkok Post
9 hours ago
- Bangkok Post
Investors lock in profits before tariff deadline
RECAP: Asian shares eased back yesterday, with Japanese markets retreating from a record peak, as investors locked in profits ahead of a crucial week that includes US President Donald Trump's tariff deadline. Trading in Thailand was also subdued, as investors monitored the growing border conflict with Cambodia and waited for news on the trade and tariff front. The SET index moved in a range of 1,191.65 and 1,227.71 points this week, before closing yesterday at 1,217.15, up 0.9% from the previous week, with daily turnover averaging 41.5 billion baht. Foreign investors were net buyers of 9.07 billion baht. Retail investors were net sellers of 5.75 billion baht, followed by institutional investors a 3.28 billion, and brokerage firms at 42.1 million. NEWSMAKERS: President Donald Trump announced a "massive" trade deal with Japan that would include a 15% tariff on imports. Under the deal, Japan will invest $550 billion into the US, which Trump said would receive 90% of the profits. Trump also agreed to reduce threatened tariffs on the Philippines, but only by one percentage point to 19%, while Manila would open up completely to US goods, he said after meeting with counterpart Ferdinand Marcos at the White House. US Treasury Secretary Scott Bessent signalled a 90-day extension of the trade "truce" with China, saying he would meet his Chinese counterparts in Stockholm next week for tariff talks, paving the way for continued trade negotiations and keeping triple-digit tariffs on hold. The EU is preparing to impose counter-tariffs on $117 billion worth of American products, including aircraft, automobiles and bourbon whiskey, if trade talks fail and Washington proceeds with threats to impose 30% tariffs on EU imports starting Aug 1. The European Central Bank kept interest rates unchanged for the first time in more than a year as it looks for clarity on EU trade with the US. President Christine Lagarde said the bank was now in a "wait-and-see" mode, with inflation at the 2% goal and the economy performing in line with or better than expectations. China's yuan hit an eight-month high against the dollar on Thursday, after the People's Bank of China set the midpoint rate at 7.1385 per dollar, its strongest since Nov 6. Trump downplayed his clash with Fed chairman Jerome Powell over cost overruns during a tour of the central bank's renovation project, making it clear that he saw lower interest rates as a more pressing concern. The EU announced a new sanctions package against Russia, its most severe yet, cutting the Russian crude oil price cap to $47.50 a barrel from $60, imposing sanctions on "shadow fleets" transporting Russian oil, and an expanded scope that includes banking and military industrial sectors. Nvidia is reportedly facing difficulty delivering its H20 AI chips to China despite recently announcing plans to resume sales, as it had earlier returned production quotas booked with Taiwan Semiconductor Manufacturing Co following a US government ban in April. It may take up to nine months to resume production. Japanese government bonds (JGBs) have been one of the world's most stable securities for decades. However, the 30-year JGB yield this week rose to 3%, the highest since the 2008 subprime crisis, reflecting massive selling. This may raise concern over a new round of financial crisis. South Korea's economy grew 0.5% year-on-year in the second quarter, the central bank said, driven by stronger private consumption and 4.2% export growth, the best in nearly five years. Tesla chief executive Elon Musk said reductions in US government support for EV makers could lead to a "few rough quarters". His company reported a second-quarter profit of $1.2 billion, down from $1.4 billion a year earlier, as sales fell to $22.5 billion from $25.5 billion. Google's parent Alphabet said 2025 capital expenditures will be $85 billion, or $10 billion greater than an earlier forecast. Its sales climbed to $81.7 billion, slightly above projections, while second-quarter profit of $28.2 billion also beat expectations. Malaysia reported second-quarter GDP growth of 4.5% year-on-year, better than the market consensus of 4.2% and up from 4.4% in the previous quarter. Finance Minister Pichai Chunhavajira says the United States has now looked at 90% of Thailand's new trade proposals and is expected to give a clear answer before Aug 1. Thailand hopes to receive a reduction in its tariff rate from 36% to below 20%, or similar to the rates in other Asean countries. Deputy Finance Minister Paopoom Rojanasakul says negotiations with the US will not include full opening of markets for US goods with zero tariffs, as seen in other countries that have reached agreements, due to concerns about domestic economic impact, especially on agricultural products. The cabinet approved the nomination of Vitai Ratanakorn as the next governor of the Bank of Thailand. The president of the Government Savings Bank was chosen over BoT deputy governor Roong Mallikamas. Finance Minister Pichai said he hopes to see monetary and fiscal policies moving in the same direction to address challenges. The Board of Investment said the value of applications in the first six months rose 139% from a year earlier to a record 1.06 trillion baht ($32.5 billion), led by a 20-fold increase to 523 billion baht in digital sector pledges, electrical and electronic goods and rail infrastructure. Car production in Thailand rose for a second straight month in June, up 12% from a year earlier to 130,223 units, the Federation of Thai Industries said. The increase followed a rise of 10.3% in May, after nearly two years of contraction. The Ministry of Finance is studying the imposition of a higher excise tax on imported electric vehicles that use a low proportion of local content. The dollar value of Thai exports rose 15.5% year-on-year in June, reflecting the continued front-loading of shipments in anticipation of higher US tariffs in the second half of this year. The House of Representatives approved amendments to the National Savings Fund Act to allow the sale of "retirement lottery" tickets as an alternative for people to save money and create a sustainable savings system. Tickets would be issued weekly with a cap on purchases at 3,000 baht per month. Suvarnabhumi Airport has more airlines serving it -- 113 -- than any other airport in the world, according to data reviewed by FlightConnections as of April 16 this year. The Tourism Authority of Thailand has set a revenue target for 2026 of 2.8 trillion baht, up 5% from this year, while acknowledging risk factors that could repeat some negative trends seen in 2025, such as a 33% decline in Chinese arrivals. Gulf Development, Thailand's largest energy company by market value, has purchased the entire shareholding of the Pak Lay hydropower project in Laos for $128 million. The Government Savings Bank is preparing to launch G-token savings bonds worth 5 billion baht, offering higher returns than market interest rates due to lower issuance costs. These will be sold alongside regular bonds worth 25 billion baht, expected to begin in late August. Real estate developers propose amending property rights laws to promote optimal land utilisation, support foreign investment and megaprojects. They suggest extending long-term land lease rights to 50-60 years from 30 and reducing social risks. The Bank of Thailand issued a warning letter following the cabinet approval of the Financial Hub Bill draft, emphasising the need to manage money laundering and terrorism financing risks, and ensure business separation from mainstream financial system operations. COMING UP: On Monday, Canada releases monthly wholesale sales. On Tuesday the US releases consumer confidence, job openings and weekly crude oil stocks. Wednesday brings German, euro zone and US GDP data; US Federal Reserve and Bank of Japan rate decisions, and Chinese manufacturing PMI. On Thursday, Germany releases an inflation update and the US releases core personal consumption expenditures, the Fed's preferred inflation gauge. On Friday, the euro zone releases an inflation update and the US releases July nonfarm payrolls and unemployment data. Locally, the Thai General Insurance Association presents an industry outlook. On Friday, the Bangkok Post Forum 2025, "Shaping the Future Economy in the New Global Order", takes place. STOCKS TO WATCH: The Thai-Cambodian conflict has had a significant impact on listed companies with exposure in Cambodia, says Krungsri Securities. SAV is the most heavily affected as 100% of its revenue is derived from Cambodia. This is followed by CBG at 13%. Other companies with moderate exposure include: OSP (5%), OR (4%), BDMS (3.7%), MAJOR (3%), BH (3%). Lower exposure is seen in BCH (1.7%), CHG, PTT (1% each). Companies with minimal exposure (less than 1%) include TOP, PTTGC, IRPC, CPF and TFG. Key Q2 earnings to watch next week: SCC, MINT and ADVANC are among the biggest names on the calendar. Large-cap stocks, especially in banking and energy, are expected to attract continued fund inflows. Recommended picks include ADVANC, AMATA and SCB. InnovestX Securities also highlights sustained foreign fund inflows into the region, which are likely to benefit the Thai market. However, short-term sentiment could be weighed down by tariff uncertainties and the Thai-Cambodian border situation. Top stock picks are BCPG, HMPRO and CHG.