The US and Japan struck a trade deal, which lowers tariffs on Japanese auto imports to 15%. In return, Japan committed to a USD 550 billion investment in the US, including Boeing planes, defence spending, and increased agricultural and rice imports.
The US and Japan have reached a significant trade deal under President Donald Trump, reducing tariffs on Japanese auto imports to 15% (down from 27.5%) and sparing Japan from new levies on other goods.
In return, Japan will invest USD 550 billion in the US, which includes purchasing 100 Boeing planes, and increasing defence spending with US firms to USD 17 billion annually (up from USD 14 billion). Japan will also purchase USD 8 billion in agricultural products and increase rice imports by 75%.
Additionally, Japan will eliminate extra safety tests on imported US cars and trucks, which President Trump has criticised as barriers to American auto sales in Japan.
“I just signed the largest TRADE DEAL in history with Japan,” Trump said about the trade deal on social media.
Japanese Prime Minister Shigeru Ishiba praised the agreement, saying the tariffs are “the lowest rate ever applied among countries that have a trade surplus with the U.S.”
Japan’s trade negotiator Ryosei Akazawa called it a success, referring to the trade deal as “#Mission Complete,” in an X post.
However, the deal excludes Japanese steel and aluminium exports, which remain subject to a 50% tariff.
Japan ranks as the fifth-largest US trading partner in goods, according to U.S. Census Bureau data. In 2024, two-way trade between the U.S. and Japan totalled nearly USD 230 billion, with Japan holding a USD 70 billion trade surplus.
