Donald Trump announces "huge" trade deal with Japan, hit with 15% tariff surcharge

"We just concluded a huge trade deal with Japan," Donald Trump said on his Truth Social platform on Tuesday, July 22, 2025, calling it "unprecedented."

" Japan will pay reciprocal customs duties of 15% to the United States ," he said, well below the 25% surcharge that the archipelago was threatened with on August 1.

Japan, though a key U.S. ally, currently faces the same basic 10 percent U.S. tariffs as most nations, as well as surcharges of 25 percent on cars and 50 percent on steel and aluminum.

This agreement with Tokyo will lead to the creation of "hundreds of thousands of jobs," added Mr. Trump, mentioning Japanese investments of "550 billion dollars" on American soil, without giving 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.

The announcement came as negotiator Ryosei Akazawa made his eighth trip to Washington. "Mission accomplished," he said.

Relieved automobile

According to Mr. 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 in the automotive sector: last year, automobiles accounted for almost 30% of Japan's exports to the United States . In the archipelago, the automotive industry represents 8% of jobs, well above that of Toyota, the world's leading 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 Mr. Ishiba, the agreement reached provides for these surcharges to be halved, and added to the pre-existing customs duties of 2.5% to arrive at a final tax of 15%.

Following this information, Toyota shares soared by more than 14% on the Tokyo Stock Exchange around 03:30 GMT.

"I am very pleased that this major step has been taken and that it dispels the uncertainty that was worrying private companies," said Tatsuo Yasunaga, president of the Foreign Trade Council, which brings together Japanese exporting firms.

But "based on the available information, it is difficult to clearly assess the impact (...). We hope that the general picture will be clarified as soon as possible," he warned.

Moreover, increasing rice imports has been a taboo subject for Tokyo in recent months, as it has maintained that it is 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 imposes sacrifices on our farmers," Mr. Ishiba said on Wednesday.

Japan currently imports up to 770,000 tonnes 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 are Japanese defense spending, which Mr. Trump is demanding be increased, Ryosei Akazawa said.

Europe "tomorrow"

Washington intends to impose massive so-called "reciprocal" surcharges, initially scheduled for April 1 and then suspended, on many of its trading partners from 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 Mr. Trump detailed on Tuesday the terms of a framework agreement reached with Jakarta, paving the way for a final agreement yet to be constructed.

"Europe will come tomorrow, and the day after, we have others coming," Donald Trump assured Republican senators on Tuesday.

Mr. Trump has imposed 30% tariffs on all imports from the EU and Mexico starting August 1. Canada faces a 35% surcharge and Brazil a 50% surcharge.

The United States also agreed on a de-escalation with China, following a rise in trade tensions between the world's two leading economic powers.