Trump, Japan Seal $550 B Deal; 15% Tariff on All Imports

President Donald Trump and Japanese Prime Minister Shigeru Ishiba have announced a “massive” trade pact that imposes a flat 15 percent duty on every Japanese import starting Aug. 1, down from the threatened 25 percent, while Tokyo commits to channeling US $550 billion into U.S. battery plants, chip fabs and port upgrades over the next decade. The White House says the deal also grants faster regulatory approvals for Japanese automakers and farm exporters, framing it as a win‑win that safeguards American jobs while unlocking new market access for Japan.

Financial markets swung on the news: Toyota and Honda shares jumped more than 10 percent in Tokyo trading, the yen weakened past ¥155 per dollar, and U.S. auto stocks slipped as analysts warned the lower tariff could undercut Detroit rivals already burdened by metal duties. Economists at Moody’s estimate the accord will add about 0.2 percentage points to U.S. GDP over five years if investment flows materialize, but caution that higher consumer prices are still inevitable once the levy hits household staples like electronics and tires.

Critics on both sides note that key enforcement mechanisms and sector carve‑outs remain vague until a formal signing ceremony slated for September. Senate Finance Chair Ron Wyden called the pact “headline‑heavy and substance‑light,” while Japan’s opposition demanded clarity on whether additional concessions—such as digital‑services taxes—were made behind closed doors. Even so, the agreement temporarily defuses a tariff standoff that had threatened to escalate into an all‑out trade war just weeks before the U.S. election.