
Trump announces 'massive' Japan trade deal with 15% tariffs
What's the story
US President Donald Trump has announced a "massive" trade deal with Japan, which includes reciprocal tariffs of 15% on Japanese exports to the US. The deal also sees auto duties lowered to 15% from the current 25%, which sparked a rally in Japanese auto stocks. In a post on Truth Social, Trump called the agreement "perhaps the largest deal ever made," and revealed that Japan will invest $550 billion into the US.
Investment details
America would 'receive 90% of the profits'
The trade deal with Japan also includes a promise from the country to invest $550 billion into the US. Trump further claimed that America would "receive 90% of the profits" from this investment. He said Japan will "open their country to trade including cars and trucks, rice and certain other agricultural products, and other things."
Job creation
Deal expected to create 'hundreds of thousands of jobs'
The trade deal with Japan is also expected to create "hundreds of thousands of jobs" in the US, Trump said. Japan's total exports to the US—its second-largest trading partner—stood at 10.3 trillion yen ($70.34 billion) between January and June this year, marking a year-on-year decrease of 0.8%. Auto exports to the US are a major part of Japan's economy, accounting for nearly 28% of all shipments in 2024, according to customs data.
Market response
Japan's markets react positively
Japan's markets reacted positively to the trade deal announcement, with major auto stocks surging by over 10%. The broader Nikkei 225 index also gained more than 2%. Shares of Honda and Toyota rose by over 8% and above 11%, respectively. Nissan's shares jumped by more than 8%, while Mazda Motor's shares surged by an impressive 17%. Mitsubishi Motors' shares also popped 13%.