Japan secures tariff reduction from US, pledges $550 billion investment

In a landmark trade development, Japan has reached a reciprocal tariff agreement with the US, marking one of the most significant bilateral deals in recent history. Announced by US President Donald Trump via social media, the agreement will lower reciprocal tariffs on Japanese imports from 25 percent to 15 percent, with sweeping implications for the automotive and manufacturing sectors.

President Trump described the deal as potentially “the largest ever made with Japan,” emphasizing its scale and economic impact.

Tariff reductions target autos and manufacturing

The tariff adjustment will benefit a wide range of Japanese product groups, particularly automobiles and auto parts.

Since April, the US has been applying 25 percent tariffs on auto-related imports. The new 15 percent rate gives Japanese automobile manufacturers a renewed competitive edge in the US market.

Japan to invest $550 billion in the US

As part of the deal, Japan has pledged a massive $550 billion investment in the US, with a structure allowing 90 percent of the profits to be retained within the US economy. This investment is expected to create hundreds of thousands of jobs.

The scale of the investment signals Japan’s long-term commitment to deepening economic ties with the US under mutually beneficial terms.

Global context: Trade negotiations and tariff landscape

The deal follows a series of trade agreements the US has recently negotiated. President Trump extended the reciprocal tariff deadline from July 9 to August 1, giving other nations time to strike similar arrangements.

Countries that have already secured deals include:

As of August 1, tariff levels for Canada, Mexico and Brazil will be raised to 35 percent, 30 percent and 50 percent, respectively, unless renegotiated.