WASHINGTON/TOKYO — President Donald Trump on Tuesday (July 22) said the US and Japan had struck a trade deal that includes a lower 15 per cent tariff that will be levied on US imports from the country, including autos.

In a post on Truth Social, Trump said the deal would include US$550 billion (S$703 billion) of Japanese investments in the United States.

He also said that Japan would increase market access to American producers of cars, trucks, rice and certain agricultural products, among other items.

Trump's post made no mention of easing tariffs on Japanese motor vehicles, which account for more than a quarter of all the country's exports to the United States and are subject to a 25 per cent tariff. But NHK reported that the deal lowers the auto tariff to 15 per cent, citing a Japanese government official.

"This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan," Trump said on the social media platform.

Japan is the most significant of the clutch of deals Trump has struck so far, with two-way trade in goods between the two superpowers totaling nearly $230 billion in 2024, and Japan running a trade surplus of nearly $70 billion. Japan is the fifth-largest US trading partner in goods, US Census Bureau data show.

The announcement sent stocks in Japan higher, led by big gains in automakers as Honda, Toyota and Nissan all gained six per cent or more, and US equity index futures gained ground. The yen strengthened against the dollar.

Reuters could not immediately confirm the elements of the deal announced by Trump, and details were scant. The White House did not immediately respond to a request for additional details.

Speaking early on Wednesday in Tokyo, Japanese Prime Minister Shigeru Ishiba said he had received an initial report from his trade negotiator in Washington but declined to comment on the specifics of the negotiation.

Ishiba is under intense political pressure in Japan, where the ruling coalition was set back by losing control of the upper house in an election on Sunday.

Ishiba said he couldn't say how a trade deal would affect his decision on whether to step down from office until he saw the details.

'Mission complete'

Trump's announcement followed a meeting with Japan's top tariff negotiator, Ryosei Akazawa, at the White House on Tuesday, according to a person familiar with the matter.

"#Mission Complete," Akazawa wrote on X.

Kazutaka Maeda, an economist at Meiji Yasuda Research Institute, said that "with the 15 per cent tariff rate, I expect the Japanese economy to avoid recession".

The deal was "a better outcome" for Japan than it potentially could have been, given Trump's earlier tariff threats, said Kristina Clifton, a senior economist at the Commonwealth Bank of Australia in Sydney.

"Steel, aluminium, and also cars are important exports for Japan, so it'll be interesting to see if there's any specific carve-outs for those," Clifton said.

Autos are a huge part of US-Japan trade, but is almost all one way to the US from Japan, a fact that has long irked Trump. In 2024, the US imported more than $55 billion of vehicles and automotive parts while just over $2 billion were sold into the Japanese market from the US.

Speaking later at the White House, Trump also expressed fresh optimism that Japan would form a joint venture with Washington to support a gas pipeline in Alaska long sought by his administration.

Japanese officials had initially doubted the practicality of the project but warmed to it — and a range of other investments dear to Trump — as a potential incentive to resolve trade disputes with Washington.

Trump aides are feverishly working to close trade deals ahead of an Aug 1 deadline that Trump has repeatedly pushed back under pressure from markets and intense lobbying by industry. By that date, countries are set to face steep new tariffs beyond those Trump has already imposed since taking office in January.

While Trump has said that unilateral letters declaring what rate would be imposed are tantamount to a deal, his team has nonetheless raced to close agreements. Trump has announced framework agreements with Britain, Vietnam, Indonesia and paused a tit-for-tat tariff battle with China, though details are still to be worked out with all of those countries.

At the White House, Trump said negotiators from the European Union would be in Washington on Wednesday.

Trump's announcement on Tuesday was of a pattern with some previous agreements. He announced the deal on social media shortly after a meeting or a phone call with a foreign official, leaving many key details a mystery, and before the other country issued its own proclamations.

Nearly three weeks after Trump announced an agreement with Vietnam — in similar fashion — no formal statement has been released by either country spelling out the particulars of the deal that was ostensibly reached.

Source: Reuters