Trump signs order reducing tariffs on Japanese cars to 15%
What's the story
US President Donald Trump has signed an executive order reducing tariffs on Japanese car imports from 27.5% to 15%. The decision comes as part of a broader trade agreement between the two countries, which was first announced in July. The deal also includes a similar 15% cap on tariffs for various other goods imported from Japan.
Investment pledge
Japan to invest $550 billion in US projects
As part of the trade deal, Japan has agreed to invest $550 billion in US projects and gradually open its economy to American goods such as cars and rice. The White House also said that Japan has promised to purchase $8 billion worth of US goods annually, including agricultural products, fertilizers, and bioethanol.
Rice import
Major concession from Japan
The deal also includes a commitment from Japan to gradually increase its purchases of US-grown rice by 75%. This is a major concession from Tokyo, which had previously resisted such moves to protect its agricultural industry. The agreement comes after months of negotiations between the two countries, following Trump's announcement of sweeping tariffs on most countries in April.
Tariff impact
Trump's tariffs send shockwaves globally
Trump's tariffs, which went into effect in August, have sent shockwaves around the world as governments and businesses adapt to the changing global market. Last month, Toyota warned that US tariffs would cost it around $10 billion this year. However, shares in Japanese carmakers and parts suppliers rose on Friday in Tokyo after the executive order was signed.