Trump announces Japan External Trade Agreement to lower threatened tariffs from 25% to 15%

“The transaction would create hundreds of thousands of jobs. There was no such thing,” Trump posted to the True Society, adding that the United States has “always had a great relationship with the country of Japan.”

The president said Japan would invest $550 billion in the United States “in my direction” and “open” its economy to American cars and the US. The 15% tax on imported Japanese goods is a meaningful drop from the 25% tax rate that Trump said in a recent letter to Japanese Prime Minister Isgar that Trump will be collected from August 1st.

Earlier on Wednesday, Isba recognized the new trade agreement, which would benefit both sides and help them work together.

In the announcement, Trump is trying to promote his capabilities as a deal maker, as well as his tariffs, even when it was first announced in early April. It led to market panic And I fear that growth will be slow, which seems to be calming for now. Important details from his post, such as whether a car built in Japan would face a higher 25% tariff that Trump imposed on the sector, remained unclear.

However, the framework fits a growth pattern for Trump, who is eager to portray tariffs as a US victory.

The tariff wave remains a source of uncertainty about whether consumers and businesses could potentially be priced higher if businesses simply pass costs. The issue was sharply seen on Tuesday General Motors reported a 35% drop In second quarter net income, it warned that tariffs would attack businesses in the coming months, and that inventory would fall.

As the August 1 deadline for the tariff rate for his letter to world leaders is approaching, Trump is also Announced a trade framework with the Philippines It imposes a 19% tariff on goods, but American-made products do not face import taxes. The president also reaffirmed his 19% tariffs in Indonesia.

The US operated $69.4 billion in trade imbalances over goods with Japan last year, according to the Census Bureau.

The United States was a $17.9 billion trade imbalance with Indonesia and a $4.9 billion imbalance with the Philippines. Neither country is wealthier than the US, and imbalance means that the US imports from more countries than it exports to them.

The president will impose broad tariffs as mentioned in a recent letter to other world leaders on August 1, raising questions about whether there will be a breakthrough in talks with the European Union. During dinner Tuesday, Trump said the EU will be in Washington on Wednesday for trade talks.

“The next day, Europe is coming tomorrow,” Trump told guests.

Earlier this month, the president sent a letter threatening the 27 EU member states with a 30% tax on goods imposed from August 1.

The Trump administration has another negotiation period with China, which is currently scheduled to run until August 12, as goods from that country will be taxed at an additional 30% baseline.

Treasury Secretary Scott Bescent said he will be in Stockholm, the Swedish capital, next Monday and Tuesday to meet with his Chinese counterparts. Bescent said his goal is to move the US economy away from consumption and allow for more consumer spending in the Chinese economy, which is more manufacturing-oriented.

“President Trump is reshaping the United States into a manufacturing economy,” Bescent said in the Fox Business Network show “Morning and Morning with Maria.” “If we can do it together, we will manufacture more, they will consume more. It will be a home run for the global economy.”