U.S. and Japan Reach Trade Deal : key facts

By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. July 23, 2025. Article no 1650.

The recent U.S.-Japan trade deal announced by President Trump includes a 15% reciprocal tariff on Japanese exports to the U.S., lowered from the previously threatened 25% rate that was set to start on August 1, 2025. Japan will invest $550 billion into the U.S. economy, and the U.S. will receive “90% of the profits” from these investments, according to Trump’s social-media statement, although details on this profit-sharing are not elaborated further.

Key aspects of the deal include:

Tariffs

A 15% tariff will apply to Japanese imports, down from the 25% initially threatened.

Japan negotiated a cut on national-security tariffs for autos imported into the U.S. from 25% to 15%. However, tariffs on steel imports remain at 50% according to Japan’s chief negotiator, Ryosei Akazawa.

Investment

Japan’s $550 billion investment commitment to the U.S. is one of the largest ever, expected to create hundreds of thousands of jobs.

Market Access

Japan will open its markets further to U.S. exports including cars, trucks, rice, and specific agricultural products.

Energy Collaboration

Japan and the U.S. will enter a joint venture to export liquefied natural gas (LNG) from Alaska.

Statements from Leaders

Japanese Prime Minister Shigeru Ishiba welcomed the deal, stating it would foster collaboration, create jobs, and produce high-quality goods.

The deal is portrayed as mutually beneficial and important for the strong relationship between the two nations.

This deal represents a significant step in the Trump administration’s strategy to use tariffs as leverage to renegotiate trade relationships and to reduce trade imbalances by encouraging Japanese investment and welcoming more U.S. goods into Japanese markets.

Some important caveats are that many details remain vague or unconfirmed by the Japanese government. For example, it is unclear if all vehicle imports from Japan will uniformly face the 15% tariff or if some will incur the previously threatened 25% rate. The exact terms regarding profit-sharing of investments are also unspecified beyond Trump’s statements.

Overall, the U.S.-Japan trade deal lowers tariffs on autos to 15%, secures massive Japanese investment in the U.S., and aims to enhance bilateral trade in goods such as vehicles and agricultural products, while fostering cooperation on energy exports and job creation.

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© Copyright 2025 – Eurasia Business News. Article no. 1650.