Trump says U.S. strikes ‘massive’ trade deal with Japan, imposes 15% tariffs

[Representatives of the USA and Japan shake hands]
Zerbor/iStock via Getty Images

U.S. President Donald Trump on Tuesday announced a “massive” trade deal with Japan, setting a 15% reciprocal tariff on the country’s exports to the U.S. and featuring a reported cut in auto duties.

Calling it “perhaps the largest Deal ever made,” Trump said Japan will invest $550 billion in the U.S., with America set to “receive 90% of the profits.”

“We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. [….] Japan will pay Reciprocal Tariffs to the United States of 15%,” Trump said in a post on Truth Social.

The deal will also open Japan’s markets to U.S. cars, trucks, rice, and other products, which Trump said will create hundreds of thousands of jobs.

Japanese Prime Minister Shigeru Ishiba said that U.S. auto tariffs on Japanese vehicles will be reduced from 25% to 15%, according to Reuters.

Auto exports to the U.S. remain vital to Japan’s economy, accounting for 28.3% of total exports in 2024, based on customs data. Shares in Japan’s Honda (NYSE:HMC [https://seekingalpha.com/symbol/HMC]) rose over 11%, Toyota (NYSE:TM [https://seekingalpha.com/symbol/TM]) climbed above 14%, Nissan (OTCPK:NSANY [https://seekingalpha.com/symbol/NSANY]) rose nearly 9%, Mazda Motor (OTCPK:MZDAY [https://seekingalpha.com/symbol/MZDAY]) climbed ~18%, and Mitsubishi Motors (OTCPK:MMTOF [https://seekingalpha.com/symbol/MMTOF]) (MMTOY) +13.4%.

Shares of South Korean carmaker Hyundai (OTCPK:HYMTF [https://seekingalpha.com/symbol/HYMTF]) and Kia also rose on the announcement.

Trump’s announcement follows a tariff warning letter he sent to Japan earlier this month, threatening to impose 25% duties starting August 1—up from the 24% “Liberation Day” tariffs unveiled in April.

In a speech following his Truth Social post, Trump also revealed that a separate liquefied natural gas agreement with Japan is being finalized and hinted at an upcoming Europe deal, though he provided no further details.

Japan-focused ETFs include the iShares MSCI Japan ETF (NYSEARCA:EWJ [https://seekingalpha.com/symbol/EWJ]), WisdomTree Japan Hedged Equity Fund (NYSEARCA:DXJ [https://seekingalpha.com/symbol/DXJ]), iShares MSCI Japan Small-Cap ETF (NYSEARCA:SCJ [https://seekingalpha.com/symbol/SCJ]), Franklin FTSE Japan ETF (NYSEARCA:FLJP [https://seekingalpha.com/symbol/FLJP]), iShares JPX-Nikkei 400 ETF (NYSEARCA:JPXN [https://seekingalpha.com/symbol/JPXN]).

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