Trump announces ‘massive' trade agreement with Japan

Yahoo

5 days ago

President Donald Trump announced a long-awaited trade agreement with Japan on Tuesday night, a framework between allies and major trading partners that appeared elusive just weeks ago.
'We just completed a massive Deal with Japan, perhaps the largest Deal ever made,' Trump said on Truth Social.
As part of the deal, US importers will pay 15% 'reciprocal' tariffs on Japanese goods exported to the United States. Japan also will invest $550 billion dollars into the United States, the president said.
Trump added that the US 'will receive 90% of the profits.' He did not specify how those investments would work or how profits would be calculated. No official term sheet has been released.
'This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%,' Trump posted.
Responding to Trump's announcement, Japan's Prime Minister Shigeru Ishiba said the government will examine the details of the deal 'carefully,' and will hold a phone or in-person meeting with the American president as necessary. But, like Trump, he gave few concrete details.
'We have been negotiating until the last minute, doing our best to negotiate with each other for automobiles or other products and national interests,' he told reporters at his office on Wednesday. 'We believe that this will contribute to the creation of jobs, the production of good products, and the fulfillment of various roles in the world through the mutual cooperation of Japan and the US.'
Shortly after posting, Trump kicked off remarks in the East Room Tuesday night by marking the trade agreement with Japan.
'I just signed the largest trade deal in history; I think maybe the largest deal in history with Japan,' Trump said during a reception with Republican members of Congress.
'They had their top people here, and we worked on it long and hard. And it's a great deal for everybody,' Trump added.
The Japan agreement was the third piece of trade-related news Trump announced on Tuesday. This comes after months of negotiations with key trading partners like the European Union, South Korea, India and dozens of others at a standstill as Trump's latest August 1 deadline for higher tariffs looms.
Tough negotiations
Both sides previously described the negotiations as tense. Asked about the chance of a trade deal with Japan in June, Trump told reporters aboard Air Force One, 'They're tough. The Japanese are tough.'
But on Tuesday Trump said the deal marked 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.'
Late last month, Trump highlighted rice sales as one point of contention between the two nations.
'They won't take our RICE, and yet they have a massive rice shortage,' Trump said in a post on Truth Social.
The country bought $298 million worth of rice from the US last year, according to US Census Bureau trade data. Between January and April of this year, Japan bought $114 million worth of rice.
But a 2021 report published by the Office of the United States Trade Representative under former President Joe Biden stated that 'Japan's highly regulated and nontransparent system of importation and distribution for rice limits the ability of US exporters to have meaningful access to Japan's consumers.'
Cars – a pillar of the Japanese economy – have also been an issue in the negotiations. Trump has said Japan does not import US cars. 'We didn't give them one car in 10 years,' he said earlier this month.
Last year, Japan imported 16,707 units of American automobiles, according to the Japan Automobile Importers Association.
But US Treasury Secretary Scott Bessent met with Japanese Prime Minister Shigeru Ishiba in Tokyo last week and posted on X that he was optimistic about reaching a deal – a sign of a potential detente in recent tensions.
'A good deal is more important than a rushed deal, and a mutually beneficial trade agreement between the United States and Japan remains within the realm of possibility,' Bessent said.
Mary Lovely at the Peterson Institute said the agreement eased the threat of even higher tariffs on Japan.
'The 'deal' relieves Japan of the 25% tariff threat and puts it potentially in a competitive position vis a vis similar US suppliers,' she wrote in an email to CNN. 'The US is unlikely to sell many cars and trucks… from the US. Agricultural liberalization (is) a win for Japanese consumers, assuming they are willing to try excellent California rice.'
A major trading partner
Unlike some of the agreements Trump has announced recently, including with Indonesia and the Philippines, Japan is a significant trading partner with the United States.
Japan is the United States' fifth-largest source of imports. Last year, it shipped $148 billion worth of goods to the US, according to Commerce Department data. Cars, car parts and agricultural and construction machinery were among the top goods Americans bought from there.
Goods from Japan briefly faced a 24% 'reciprocal' tariff before Trump enacted a 90-day pause in April. Since then goods have faced a 10% minimum tariff.
In early July, Trump sent a letter to Japan's prime minister, Shigeru Ishiba, threatening to enact a 25% tariff on August 1.
Meanwhile, the US exported $80 billion worth of goods to Japan last year. Oil and gas, pharmaceuticals and aerospace products were the top exports.
Japan has been in an uncomfortable position, since China is its top trading partner and the Trump administration had been looking to pressure allies to reduce their levels of trade with China to get a trade deal with the US, according to multiple reports.
The latest agreement between the US and Japan follows an expanded trade agreement the two countries signed in 2019, which went into effect the subsequent year and allowed for more goods to be shipped duty-free.
Japan held some leverage over the United States in its trade agreement: The nation is America's biggest foreign creditor. Japan holds $1.1 trillion of US Treasuries, used to finance America's massive and mounting debt.
This story has been updated with additional context and developments.
CNN's John Liu, Yumi Asada and Matt Egan contributed reporting.
Melden Sie sich an, um Ihr Portfolio aufzurufen.