President Donald Trump announced on Tuesday a trade agreement with Japan, which makes it the largest American trading partner to negotiate an agreement as a White House threat To impose prices on dozens of countries in a few days.
Before the agreement, Japan had to face the prospect of a price rate of 25% take effect August 1. Instead, products from the fifth largest American trading partner will be slapped with a price of 15%, in exchange for a desire on the part of Japan to import goods, among other concessions.
In an article on social networks on Tuesday evening, Trump presented the agreement as a “massive agreement”. The White House has not yet published all the details of the agreement.
Japanese Prime Minister Shigeru Ishiba also celebrated the agreement. “With the national interests of the two countries in mind, we have been able to conclude an agreement at the moment,” said Ishiba.
The Japanese Nikkei index jumped 3.5% on Wednesday, while the main American clues slightly pushed early exchanges.
Here is what you need to know about what is in the trade agreement and what comes then:
What is in the American trade agreement with Japan?
The trade agreement reduces the rate rate on Japanese products to 15%, placing it below the threatened rate by 25% but greater than one universal rate 10% in the face of almost all imports.
Even more, the United States agreed to set a 15% price on Japanese cars, which placed it below the rate of 25% placed on vehicles imported from other nations.
Japan bought nearly $ 80 billion in American products in 2024, while the United States bought around $ 148 billion in Japanese products, according to the Office of the US trade representativeA government agency.
Cars and car parts represented around 52 billion dollars of imported Japanese products, representing more than third of the products purchased by the United States, according to government data.
Toyota’s shares, based in Japan, climbed more than 13% on Wednesday, while Honda jumped approximately 12%.
In exchange for the softening of American prices, Japan has agreed to open its economy to imports of trucks, rice and other agricultural goods, said Trump.
Japan has also agreed to invest $ 550 billion in the American economy, added Trump, but the president did not specify how the funds would be spent.
President Donald Trump pronounces remarks at a meeting with Philippine President Ferdinand Marcos Jr. at the Oval Maison Blanche office on July 22, 2025 in Washington.
Andrew Caballero-Reynolds / AFP via Getty Images
How much trade agreements has the White House reach so far?
When Trump delayed the start of the so-called “reciprocal prices” in April, the White House promised to conclude 90 trade agreements in 90 days. Before this deadline launched, Trump offered a wave of similar prices specific to the country with a new effective date of August 1.
So far, Trump has negotiated agreements with the United KingdomIndonesia, Vietnam, Philippines and Japan. The White House too reached A preliminary agreement with China which lowered the prices of the Tit-for-Tat previously imposed by the two largest world economies.
For his part, the president insisted on the fact that the samples underway and out of sight are a key element of his negotiation strategy.
“The president and his sales team want to conclude the best offers for the American people and the American worker,” said the White House press secretary Karoline Leavitt last month when she announced the deadline of August 1.
Price increases can hit coffee, shoes, household appliances and a range of other products if additional prices take effect on August 1, analysts Said previously ABC News.
