U.S. and Japan Finalize Trade Deal Featuring 15% Tariffs on Japanese Imports
September 4, 2025 — The United States and Japan have reached an agreement that starts a new economic era. U.S. President Donald Trump signed the order on Thursday to enforce the deal. The plan sets a clear 15% tax on nearly all products from Japan, including cars.
Key Elements of the Trade Deal
The deal came in July after long talks. Hard work on details fixed small issues. The plan has several parts:
- Tokyo’s Commitment to Invest: Japan will send $550 billion to projects picked by the U.S. government. This promise shows a deeper side of shared investment.
- Agricultural Purchases: Japan will buy more U.S. crops such as corn, soybeans, and rice. The plan pushes a 75% rise in rice imports. Japan also will take on $8 billion worth of other U.S. crop items.
- Commercial Aircraft and Defense Equipment: Japan will take U.S. commercial planes. The order for 100 Boeing jets gives a boost to the air trade.
- Market Access Improvements: The new deal clears new ways in fields like manufacturing, plane-building, farming, and cars. This change should open more paths for U.S. companies.
- Sector-Specific Tariffs: Besides the main 15% tax, Japan will pay extra on cars, car parts, aerospace goods, common drugs, and natural resources.
The order makes sure no extra taxes fall on Japanese products beyond the agreed sums. Tax relief for cars starts seven days after the order. These taxes apply to products that entered the U.S. from August 7, 2025. ### Economic Implications and Industry Impact
This tax rule is part of President Trump’s wider global campaign on tariffs. It has upset supply lines, especially in Japan’s key car sector.
- Toyota’s Warning: Toyota says it will lose nearly $10 billion. The extra cost cuts its profit forecast by 16%.
- U.S. Automotive Rivals: Ford and General Motors expect losses too. Ford faces a $3 billion loss while General Motors may lose up to $5 billion.
Political Ramifications in Japan
The deal comes as Japan faces more political strain. Prime Minister Shigeru Ishiba feels pressure after the July vote by his party. The Liberal Democratic Party lost ground because of:
• Limited plans to control rising prices
• Remains of past political faults
• Low interest among young voters
Some insiders want a change of leader. Analysts at Eurasia Group see a 60% chance that Ishiba will lose the vote on Monday. The vote may force him to step down because of growing party dissent.
Next Steps and Diplomatic Engagements
Japan’s top trade envoy, Ryosei Akazawa, recently went to Washington. He carried an invite from Prime Minister Ishiba for President Trump to visit Japan. This move shows that talks will keep going, even with a tough deal in place.
This trade deal marks a big shift in U.S.-Japan economic ties. It mixes a set tax with moves on investment and market change. As the plan takes effect, its effects will shape trade and politics in both lands.
For more news on this story and other market updates, stay tuned.
Reported by Anniek Bao, CNBC
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