Customs duties: Donald Trump announces a "huge" agreement with Japan, hit by a 15% surcharge
The US president claims that this agreement, which provides for Tokyo to pay "reciprocal customs duties of 15% to the United States", will create "hundreds of thousands of jobs".
By Le Parisien with AFPHe appears very satisfied. US President Donald Trump announced the conclusion of a "huge" trade agreement with Japan, with significant relief for Japanese cars, even though a compromise with the EU, Mexico, or Canada remains uncertain by the August 1 deadline.
"We just concluded a huge trade deal with Japan," Donald Trump said on his Truth Social platform on Tuesday, calling it "unprecedented." "Japan will pay a 15% reciprocal tariff to the United States," he said, well below the 25% surcharge the archipelago was facing on August 1.
Japan, though a key U.S. ally, currently faces the same basic 10% U.S. tariffs as most nations, as well as surcharges of 25% on cars and 50% on steel and aluminum.
This agreement with Tokyo will lead to the creation of "hundreds of thousands of jobs," added Donald Trump, mentioning Japanese investments of "550 billion dollars" on American soil, without providing details other than that "90% of the profits would be received by the United States."
"We believe it is a great achievement to have achieved the largest reduction (in surcharges) among countries with a trade surplus with the United States," said Japanese Prime Minister Shigeru Ishiba. "I will build a new golden age for Japan-US relations," he added on the social network X. The announcement came as negotiator Ryosei Akazawa made his eighth trip to Washington. "Mission accomplished," he said.
According to Donald Trump, Japan has agreed to open up "to trade in cars and pickup trucks, rice, and a number of other agricultural products" from the United States. The stakes were high on the automobile front: last year, it represented almost 30% of Japan's exports to the United States. In the archipelago, the automobile industry accounts for 8% of jobs, well above Toyota, the world's largest manufacturer.
However, following the 25% surcharges imposed on automobiles since April, Japanese car exports to the United States plummeted by a quarter year-on-year in May and June. According to Shigeru Ishiba, the agreement stipulates that these surcharges will be halved, and added to the existing 2.5% tariffs, to reach a final tax of 15%.
Following this news, Toyota shares soared by more than 14% on the Tokyo Stock Exchange around 12:30 p.m. local time (3:30 a.m. in Paris). "I am very pleased that this major step has been taken and dispels the uncertainty that was worrying private companies," reacted Tatsuo Yasunaga, president of the Foreign Trade Council, which brings together Japanese exporting firms. However, "based on the available information, it is difficult to clearly assess the impact (...). We hope that the overall picture will be clarified as soon as possible," he warned.
Moreover, increasing rice imports has been a taboo subject for Tokyo in recent months, claiming to be defending the interests of local farmers. "We have continued negotiations to reach an agreement that meets the national interests of both Japan and the United States," and "nothing requires sacrifices from our farmers," Shigeru Ishiba said on Wednesday.
Japan currently imports up to 770,000 tons of tariff-free rice and could import more US grain within that limit—at the expense of other sources, he explained. However, the 50% US tariffs on steel and aluminum are not affected by the agreement, nor is Japan's defense spending, which Donald Trump has been calling for, Akazawa said.
Washington intends to impose massive so-called "reciprocal" tariffs, initially scheduled for April 1 and then suspended, on many of its trading partners starting August 1st , unless they conclude agreements with the United States by then. The Trump administration currently has four such agreements under its belt: in addition to Japan, the US president announced on Tuesday that he had concluded one with the Philippines. The United States has also already reached agreements with the United Kingdom and Vietnam.
And Donald Trump detailed the terms of a framework agreement reached with Jakarta on Tuesday, paving the way for a final agreement yet to be finalized. "Europe will come tomorrow, and the day after, we have others coming," Donald Trump assured Republican senators on Tuesday.
Donald Trump has imposed 30% tariffs on all imports from the EU and Mexico, effective August 1. Canada faces a 35% surcharge, and Brazil a 50% surcharge. The United States has also agreed to de-escalate trade tensions with China, following a surge in trade tensions between the world's two largest economies.
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