After Months of Intense Negotiations, President Donald Trump Announces Major Trade Deal with Japan

After Months of Intense Negotiations, President Donald Trump Announces Major Trade Deal with Japan

[Washington, July 23, 2025] — U.S. President Donald Trump on Tuesday announced that, following months of intense negotiations, his administration has finalized a “major” trade agreement with Japan.

Trump stated that under the deal, the United States will impose a 15 percent tariff on Japanese exports, while Japan will invest $550 billion in the U.S. Posting on his Truth Social platform, he wrote: “We have just finalized a massive deal with Japan—possibly the biggest deal in history.”

The agreement will also see Japan open its market to U.S. cars, rice, and certain agricultural products. Trump expressed optimism that the deal would “create millions of new jobs.”

Speaking later at an event with members of Congress, Trump added that the two nations had also agreed on a joint project to extract liquefied natural gas (LNG) in Alaska.

“A deal must be beneficial for all sides—I always say that,” he noted.

Japanese Prime Minister Shigeru Ishiba, who recently lost his parliamentary majority in a by-election, said he would “carefully review” the full details of the agreement but believed it to be in the national interest.

Japanese media confirmed that, as part of the deal, the U.S. has reduced its tariffs on Japanese cars from 25 percent to 15 percent. The Trump administration’s 50 percent tariffs on aluminum and steel had long been a major sticking point in negotiations.

Had the deal not been finalized by August 1, Japan would have faced a 25 percent tariff rate—up from the current 10 percent on their exports.

The announcement had an immediate impact on the markets.
Mazda’s shares rose by more than 17%.
Toyota, Nissan, and Honda saw their stock prices rise by 8.5 to 12%.
The Nikkei 225 Index surged nearly 3%.

William Chow, Deputy Director and Japan Chair at the Hudson Institute, commented:
“A 15 percent ‘reciprocal tariff’ is better news for Japan than the previous 25 percent. However, it’s still unclear whether they received any exemption from Section 232 tariffs on steel and semiconductors.”

U.S. Treasury Secretary Scott Besant described the deal as “historic.” On X (formerly Twitter), he wrote:
“We are committed to deepening this long-standing alliance and entering a new golden era under President Trump’s leadership.”

Japan, the world’s fourth-largest economy, is currently the United States’ fifth-largest trading partner.
In 2024, the U.S. imported $148.2 billion worth of goods from Japan
and exported $79.7 billion worth of goods to Japan. (Source: U.S. Census Bureau)

Brian Jacobsen, Chief Economist at Annex Wealth Management, remarked:
“Just a year ago, such tariff rates would’ve been seen as a blow. Today, even a 15 percent tariff is being welcomed by the markets as a sigh of relief.”