Donald Trump has announced a trade deal with Japan, potentially resolving weeks of fraught negotiations that had caused economic uncertainty in Tokyo and mounting speculation about the future of Prime Minister Shigeru Ishiba. The US president declared on social media: “We just completed a massive deal with Japan,” adding that Japan would invest $550 billion in the United States.
Under the agreement, Japanese imports to the US will face a 15% tariff, an improvement on the 25% Trump had threatened to impose from 1 August. Ishiba later confirmed that tariffs on cars—which account for more than a quarter of Japanese exports to the US—would be lowered to 15%, with no volume limits. Shares in Japanese automakers surged, and the Nikkei 225 index gained over 1%.
Trump also claimed Japan would open its market to US products including cars, trucks, rice, and certain agricultural items, which had been sticking points in negotiations. However, US tariffs of 50% on Japanese steel and aluminium are not part of the deal, and it includes no reference to defence spending, according to Japan’s top tariff negotiator, Ryosei Akazawa.
The deal comes as Ishiba faces growing opposition within his own party after his coalition lost its upper-house majority in elections last weekend, following the loss of its lower-house majority in October. Japan’s Mainichi newspaper reported that Ishiba would announce his resignation as prime minister by the end of next month, though the Guardian could not confirm this. A senior administration official told NHK that Trump’s post was “accurate” and “welcomed” by Japan.
The agreement follows similar pacts with the Philippines, Indonesia, the UK, and Vietnam, as Trump faces pressure to finalise trade deals ahead of his 1 August tariff deadline. On Tuesday, Trump also announced a 19% tariff rate for the Philippines and Indonesia, down from initial higher rates.
