US President Donald Trump announced a long-awaited trade agreement with Japan on Tuesday, a framework between allies and major trading partners that appeared elusive just weeks ago. The deal includes tariffs on Japanese goods exported to the US, with US importers set to pay 15% “reciprocal” tariffs.
Under the agreement, Japan will invest $550 billion in the US, with Trump stating that the US will receive 90% of the profits. This injection of capital will support key sectors such as pharmaceuticals and semiconductors.
The deal includes increased trade on automobiles and car parts, putting Japan at an advantage over other major vehicle exporters. The share of American rice imports may also increase under the current agricultural trade framework.
The agreement follows months of negotiations with key trading partners like the European Union, South Korea, India, and dozens of others. The US exported $80 billion worth of goods to Japan last year, with oil, gas, pharmaceuticals, and aerospace products among top exports.
Trump hailed the deal as “the largest trade deal in history” for the US, while Japanese Prime Minister Shigeru Ishiba described it as a “great deal for everybody.”
Source: https://edition.cnn.com/2025/07/22/business/japan-trade-agreement-us