US President Donald Trump has signed an executive order reducing tariffs on Japanese car imports from 27.5% to 15%, easing pressure on automakers such as Toyota, Honda, and Nissan.
The order finalises a deal first announced in July, applying a 15% levy to nearly all Japanese exports to the US, including vehicles and pharmaceuticals.
Trade-Offs
In return, Tokyo pledged to invest $550bn (£410bn) in US projects and gradually open its economy to American products—particularly cars and rice.
The White House said Japan also committed to buying $8bn worth of US goods annually, ranging from agricultural products to bioethanol, and to increase imports of US-grown rice by 75%, a concession long resisted to protect its farmers.
“This agreement reduces our trade deficit with Japan and creates breakthrough opportunities for American businesses,” the order stated.
Reaction in Tokyo
Japan’s top negotiator Ryosei Akazawa welcomed the signing, posting a White House announcement with the word “Finally” in Japanese.
Trump hailed the deal as “massive” when it was unveiled:
“It’s a great deal for everybody. I always say it has to be great for everybody.”
Wider Impact
Japan relies heavily on exports, with cars accounting for around 20% of total shipments—and the US serving as its biggest market.
Trump’s broader tariff strategy, launched in April and enforced from August, has roiled global trade. Toyota recently warned US tariffs could cost it $10bn this year.
Markets reacted positively: shares in Japanese automakers and parts suppliers rose in Tokyo trading on Friday after the announcement.
