Trump announces trade deal with Japan that lowers threatened tariff to 15 pc
WASHINGTON: US President Donald Trump announced a trade framework with Japan on Tuesday, placing a 15% tariff on goods imported from that country.
“This deal will create hundreds of thousands of jobs — there has never been anything like it,” Trump posted on Truth Social, adding that the United States “will continue to always have a great relationship with the country of Japan.”
The president said Japan would invest “at my direction” $550 billion into the US and would open its economy to American cars and rice. He noted that the 15% tariff on Japanese imports represented a significant reduction from the 25% rate that he had outlined in a recent letter to Japanese Prime Minister Shigeru Ishiba, which was due to come into effect on August 1.
Early on Wednesday, Ishiba acknowledged the new trade agreement, saying it would benefit both sides and help them work together.
With the announcement, Trump sought to tout his deal-making ability — even though his tariffs, first announced in early April, had sparked market panic and fears of slower growth that later subsided. Key details remained unclear from his post, such as whether Japanese-built cars would still face the higher 25% tariff he had previously imposed on the sector.
The framework fitted a growing pattern for Trump, who was eager to portray the tariffs as a win for the US. His administration said the revenue would help reduce the budget deficit and that more factories would relocate to America to avoid the import duties, thereby eliminating trade imbalances.
The wave of tariffs continued to raise uncertainty over whether they could drive up prices for consumers and businesses if companies simply passed on the costs. The impact was seen sharply on Tuesday after General Motors reported a 35% drop in net income during the second quarter and warned that tariffs would hit its business in the months ahead, causing its share price to tumble.
As the August 1 deadline for the tariff rates in his letters to world leaders approached, Trump also announced a trade framework with the Philippines that would impose a 19% tariff on Philippine goods, while American-made products would face no import duties. He also reaffirmed his 19% tariffs on Indonesia.
The US ran a $69.4 billion goods trade deficit with Japan last year, according to the Census Bureau. It had deficits of $17.9 billion with Indonesia and $4.9 billion with the Philippines. Both nations were less affluent than the US, and a deficit meant America imported more from those countries than it exported to them.
The president was set to impose the broad tariffs listed in his recent letters to other world leaders on August 1, raising questions over whether there would be any breakthrough in talks with the European Union. At a dinner on Tuesday, Trump had said the EU would be in Washington on Wednesday for trade talks.
“We have Europe coming in tomorrow, the next day,” Trump told guests.
Earlier this month, he had sent a letter threatening the 27 member states of the EU with 30% duties on their goods, to be imposed on August 1.
The administration had a separate negotiating period with China, set to run through August 12, under which Chinese goods were taxed at an additional 30%.
Treasury Secretary Scott Bessent said he would be in Stockholm next Monday and Tuesday to meet his Chinese counterparts. He added that his goal was to shift the American economy away from consumption and towards greater consumer spending in the manufacturing-heavy Chinese economy.
“President Trump is remaking the US into a manufacturing economy,” Bessent said on Fox Business Network’s Mornings with Maria. “If we could do that together, we do more manufacturing, they do more consumption. That would be a home run for the global economy.”
By RSS/AP
