Donald Trump has announced a trade deal with Japan, potentially resolving weeks of fraught negotiations between the two allies which had caused political uproar and economic uncertainty in Tokyo.
“We just completed a massive Deal with Japan,” the US president announced in a post online, adding “Japan will invest, at my direction, $550 Billion Dollars into the United States.”
Japanese prime minister Shigeru Ishiba said his country’s tariff negotiator had received the details of the deal and he would examine them before responding. “Our overarching concern is the interests of the nation,” he said.
In the post on Tuesday evening, Trump said Japanese imports would face a 15% tariff, an improvement on the 25% he threatened to impose from 1 August earlier this month.
He also claimed that Japan would open its market to US products including cars, trucks, rice and certain agricultural products – many of which had proved to be a sticking point in negotiations.
A senior member of the Ishiba administration told public broadcaster NHK, “what President Trump posted on social media is accurate, and it is something that Japan welcomes.”
It was unclear what tariff rate US imports to Japan would be charge at under the deal.
Ishiba had reportedly tied his fate to the success of tariff negotiations, after his coalition lost its upper house majority in elections last weekend.
Asked about his future as leader now that negotiations were reaching their conclusion, the prime minister said he was focused on the national interest and, “would make an announcement once details of the deal were finalised.”
Ishiba is facing growing calls to step down from within his own party following the upper house elections last weekend and a loss in the lower house in October, which came after he called a snap election. His position is widely regarded as untenable in light of the two consecutive electoral defeats.
Japan’s auto industry – which accounts for 8% of jobs in the country – was reeling from a 25% levy on imports to the US. The announcement on Tuesday made no mention of easing tariffs on automobiles – which account for more than a quarter of all Japanese exports to the US – but NHK reported that the rate would be lowered to 15%.
Shares in Japanese automakers surged after the announcement, with Japan’s overall Nikkei 225 index of stocks gaining more than one percent.
Earlier this month, Trump bemoaned Japanese consumers’ lack of enthusiasm for American cars and rice – labelling Japan “very spoiled”. He suggested that a deal with Japan might not be possible.
Japan’s top tariff negotiator Ryosei Akazawa has been in the US this week for his eighth round of talks. Japan’s Asahi newspaper reported Akazawa met with Trump at the White House on Tuesday.
The deal with Japan follows agreements struck in recent weeks with the Philippines, Indonesia, the UK and Vietnam, and come as Trump has faced pressure to wrap up trade pacts after promising a flurry of deals ahead of his 1 August tariff deadline.
Trump announced a new 19% tariff rate for goods from the Philippines on Tuesday, after a visit to the White House from Philippine president Ferdinand Marcos Jr. Trump said there would be no tariffs from the Philippines on US goods.
Later, the White House confirmed the same 19% tariff rate for Indonesia, down from an initial 32%, as it released terms of a deal reached last week that calls for Indonesia to eliminate tariff and non-tariff barriers on most US goods.
With Reuters
