Under the agreement, Japan’s tariffs on US goods will be reduced from a planned 25 percent to 15 percent. In return, Japan has pledged to invest $550 billion in the US and open its markets to American automobiles, trucks, and agricultural products.
Trump described the deal as “possibly the largest ever,” anticipating it will create hundreds of thousands of jobs in the US. He specifically noted that the US would receive 90 percent of the profits from Japan’s investment. Additionally, both sides will collaborate on liquefied natural gas (LNG), with plans for a joint venture in Alaska.
Japanese Minister of Economy and Fiscal Policy, Ryosei Akazawa, arrived in the US on July 21st for the 8th round of tariff negotiations. On the morning of July 23rd, he presented a proposal to reduce the trade deficit to President Trump at the White House. Following the announcement of the deal, the Japanese Yen’s exchange rate fell.
Notably, the 15 percent tariff rate agreed upon is the lowest among newly announced reciprocal tariff rates. Japan will open its markets to various agricultural products, including rice, while industrial products such as automobiles and trucks will also be included in the trade liberalization efforts.
