The US and Japan finalised a trade and investment agreement reducing tariffs, launching a USD 550 billion Japanese investment fund in strategic US industries, and strengthening cooperation on critical minerals and supply chains.
RF Report
The US and Japan finalised a new trade agreement on 28 October 2025 that implements the terms of a July deal, easing tariff tensions and deepening economic cooperation.
Under the arrangement, the US will apply a reduced 15% tariff on certain imports from Japan, avoiding the previously threatened 25% rate.
In return, Japan will establish a massive USD 550 billion investment fund aimed at US industries considered strategic to both economies. The funding will target sectors such as semiconductors, pharmaceuticals, metals, shipbuilding, artificial intelligence, energy—including nuclear power—and the mining and processing of critical minerals.
Japan also pledged to boost purchases of US energy and expand access for American exports, including US-made vehicles and mobile software.
Alongside the trade deal, President Donald Trump and Prime Minister Sanae Takaichi signed a separate cooperation agreement to strengthen supply chains for rare earth elements and critical minerals—materials essential for batteries, electronics, and military technology. The initiative is expected to support new investment in mining and processing, reducing dependence on external suppliers.
