After Indonesia, the Philippines and Vietnam, US President Donald Trump announced on Tuesday, July 22, on his Truth Social platform that he had reached a “massive [deal]” with Japan, which would be subject to a 15% customs tax – lower than the 25% rate he had initially floated. Tariffs will remain, however, at 50% for steel and aluminum.
Trump said he had secured a commitment from Tokyo to invest $550 billion in the US, notably in a natural gas site in Alaska, which he claimed would “[create hundreds of thousands of jobs].” Trump also pointed to increased access to the Japanese market for US cars, rice and other agricultural goods. “We believe it is a major achievement to have obtained the largest reduction [in tariffs] among countries with a trade surplus with the United States,” responded Japanese Prime Minister Shigeru Ishiba, in a measured statement.
Asia’s second-largest economy is a diplomatic ally of the US and a bulwark against Chinese dominance in the region. Japan managed to negotiate a 15% US tariff on car exports, compared to the 25% rate applied to the rest of the world. The sector is strategic for the archipelago, accounting for about 30% of its exports to the US and 8% of all jobs in the country. The stock prices of automakers Toyota and Honda closed up 14.3% and 11.1% respectively at the Tokyo Stock Exchange on July 23.
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