WASHINGTON DC: US President Donald Trump has announced that the United States has reached a significant trade agreement with Japan, one of its largest trading partners.
According to Trump’s social media post, the deal involves Japan committing to invest $550 billion (£407 billion) in the US and agreeing to a reciprocal tariff rate of 15%, BBC reported.
Trump also stated that Japan will open its markets to various US products, including automobiles, trucks, rice, and certain agricultural goods. Japan’s chief trade negotiator, Ryosei Akazawa, posted on Facebook about his visit to the White House, using the hashtag “Mission accomplished.”
Speaking at a White House event on Tuesday evening, Trump described the agreement as “the largest trade deal in history” with Japan. He emphasized the extensive efforts of both sides and highlighted that the deal benefits all parties involved.
Additionally, Trump mentioned that a trade agreement with the European Union would be announced on Wednesday, with other deals expected to follow soon.
Japan’s Prime Minister, Shigeru Ishiba, told reporters on Wednesday that he could not comment on the outcome until the details had been thoroughly reviewed.
Earlier this month, Trump threatened to impose a 25% tariff on Japanese exports to the US if a new trade deal was not finalized by August 1. This proposed rate was slightly higher than the 24% tariff announced in April.
Currently, Japanese vehicle imports into the US face a 25% tariff, similar to many other countries. The tariffs planned in April, which targeted numerous US trading partners, were temporarily suspended for 90 days amid global market volatility, allowing Tokyo’s trade officials time to negotiate.
Following the announcement, Japan’s benchmark stock index, the Nikkei 225, rose by about 2% in Tokyo. Shares of leading automakers such as Toyota, Nissan, and Honda surged after NHK reported that existing tariffs on Japanese car manufacturers would be reduced.
This development comes as Prime Minister Ishiba faces increasing pressure to resign after his Liberal Democratic Party (LDP) lost its majority in the upper house elections over the weekend. The LDP had already lost control of the more powerful lower house last year.
(Inputs from BBC)
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