WASHINGTON: US President Donald Trump announced a “massive” trade deal with Japan on Tuesday, marking the fifth agreement secured under his administration’s push for “90 deals in 90 days.” The deal includes a $550 billion investment from Japan into the US, with Trump claiming it will create “hundreds of thousands of jobs.”
The agreement comes just days before an August 1 deadline, after which the US threatened to impose higher tariffs on countries failing to negotiate new trade terms. Japan faced potential auto tariff increases from 10% to 25%, but under the new deal, levies on vehicles will drop to 15%.
Japanese Prime Minister Shigeru Ishiba confirmed the reduction, which sent shares of major automakers like Toyota and Mitsubishi surging by 14%. The Nikkei index also rose 3.5%. “We continued negotiations to meet the national interest of both Japan and the United States,“ Ishiba said.
However, Japan’s trade envoy Ryosei Akazawa clarified that 50% tariffs on steel and aluminium remain unchanged. Increased defense spending, a key demand from Trump, was also excluded from the agreement.
The deal includes expanded US agricultural exports, particularly rice—a sensitive issue in Japan. Ishiba assured that Japan’s agricultural sector would not be “sacrificed,“ with additional imports staying within WTO commitments.
Business leaders cautiously welcomed the deal, though some demanded more details. Tatsuo Yasunaga of the Japan Foreign Trade Council called it a “major milestone” but stressed the need for clarity on its full impact.
Public reaction in Japan was mixed. “It’s disappointing that Japan cannot act more strongly,“ said Naomi Omura, an 80-year-old voter. Meanwhile, Tetsuo Momiyama, 81, criticized Ishiba’s leadership, saying, “It’s good timing for him to go.” Reports suggest Ishiba may resign following recent election losses.
Trump also announced a smaller tariff reduction for the Philippines, another US ally, but negotiations with China, Canada, Mexico, and the EU remain unresolved. US Treasury Secretary Scott Bessent is set to meet Chinese officials next week in Stockholm.
China responded cautiously, with foreign ministry spokesman Guo Jiakun stating, “China supports equal dialogue to solve trade issues.” - AFP
