Trump announces massive' trade deal with Japan with 15% tariffs

U.S. President Donald Trump on Tuesday stateside announced that he had made the “largest Deal ever” with Japan, that involves “reciprocal” tariffs of 15% on the country's exports to the U.S.

In a post on Truth Social, Trump also said that Japan will invest $550 billion into the United States, adding that the U.S. will “receive 90% of the Profits.”

Trump also said that Japan will “open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things.”

The U.S. president added that the deal would also create “Hundreds of Thousands of Jobs.”

“A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief,” said Brian Jacobsen, chief economist at Annex Wealth Management.

In his tariff letter sent out to Japan earlier this month, Trump had threatened 25% tariff on its exports to the U.S. from Aug. 1, one percentage point higher from the 24% rate announced during his April 2 “Liberation Day” tariffs.

Japanese automobiles imported into the U.S. already attract a 25% tariff in line with the rest of the countries. Auto exports to the U.S. are a cornerstone of Japan's economy, making up 28.3% of all shipments in 2024, according to customs data.

This announcement comes just days after Japanese Prime Minister Shigeru Ishiba's governing coalition lost its majority in the country's upper house elections that had raised worries of undermining the country's negotiating position.

Ishiba had said after the loss that he would stay on as prime minister, but Japanese media outlet Yoimuri reported early Wednesday that he would decide whether to continue after assessing the progress of the tariff negotiations, according to a Google translation of the report in Japanese.