US-Japan Trade Deal Lowers Auto Tariffs to 15% Expands Investment

U.S. President Donald Trump formalized a trade agreement with Japan that includes a 15% baseline tariff on most Japanese imports, including automobiles, reducing the previous auto tariff from 27.5%. The agreement requires Japan to invest $550 billion in U.S. projects and increase its purchases of American agricultural products and manufactured goods, expanding market access in multiple sectors. The tariff adjustments are retroactive to August 7, 2025, and tariffs on certain goods like commercial airplanes remain exempt. Japanese Trade Representative Ryosei Akazawa confirmed the tariff reduction will take effect within two weeks and highlighted ongoing cooperation between the countries, including the formation of a committee to consult on investment projects. Despite initial discrepancies over auto tariff rates during negotiations, the deal was finalized and welcomed by Japanese industry leaders like Toyota. The agreement is part of a broader U.S. tariff strategy imposing minimum import duties globally, with different rates for various countries, including 20% for the EU and 34% for China.