The US president has declared victory in what he’s calling a “massive” new trade deal with Japan. The announcement dropped Tuesday and comes after months of tense negotiations behind closed doors.
According to Trump, the deal includes a 15% tariff on Japanese exports and a promise from Tokyo to invest a jaw-dropping $550 billion into the US economy. Yes, billion—with a “B.”
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made,” Trump posted on Truth Social. “Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.”
He also said Japan has agreed to open its markets to US rice, cars, and agricultural goods, adding that the move could bring “hundreds of thousands of jobs” to the US.
“There has never been anything like it,” he wrote.
Later, at a congressional reception, Trump said the two sides had agreed to team up on a liquified natural gas project in Alaska, calling it a “great deal for everybody.”
Treasury Cheers, Tokyo Hesitates
US Treasury Secretary Scott Bessent was quick to back the announcement, calling it a “historic agreement” and praising the “Golden Age” of US–Japan cooperation under Trump.
But things weren’t quite as euphoric in Tokyo.
Japanese Prime Minister Shigeru Ishiba told reporters he’d “carefully examine” the deal. Still, he admitted it likely served Japan’s broader interests.
He confirmed reports that US tariffs on Japanese autos would drop from 25% to 15%, but said aluminium and steel duties—key sticking points—weren’t included and would stay in place for now.
Deadline Deal, Market Surge
The deal beats a looming August 1 deadline, after which Japan would have faced 25% duties on most exports. So, relief swept through Japanese markets.
Auto stocks jumped. Mazda surged over 17%, and Toyota, Nissan, and Honda all climbed 8.5–12%. The broader Nikkei 225 rose nearly 3% on the news.
Big Picture
Even though details are still fuzzy, the deal could be the biggest Trump trade agreement yet. It follows earlier moves involving the UK, Vietnam, Indonesia, and the Philippines—not to mention the still-uncertain 90-day trade truce with China.
Japan is the world’s fourth-largest economy and America’s fifth-biggest trading partner. In 2024, the US imported $148.2 billion in Japanese goods and exported $79.7 billion to Japan.
“It’s a sign of the times that markets would cheer 15% tariffs,” said Brian Jacobsen, chief economist at Annex Wealth. “A year ago, that number would’ve caused panic. Now? It’s practically good news.”
With input from Al Jazeera
The latest news in your social feeds
Subscribe to our social media platforms to stay tuned