CNN
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President Donald Trump announced a long-awaited trade agreement with Japan on Tuesday night, in which Japan will pay 15% “reciprocal tariffs” on goods exported to the United States.
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made,” Trump said on Truth Social.
As part of the deal, Japan will also invest $550 billion dollars into the United States, the president said. Trump added that the US “will receive 90% of the profits.” He did not specify how those investments would work or how profits would be calculated. No official term sheet has been released.
“This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%,” Trump posted
Despite what both sides described as tense negotiations, Trump said the deal marked 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.”
Goods from Japan briefly faced a 24% “reciprocal” tariff before Trump enacted a 90-day pause in April. Since then goods have faced a 10% minimum tariff.
But in early July, Trump sent a letter to Japan’s prime minister, Shigeru Ishiba, threatening to enact a 30% tariff on August 1.
Japan is the United States’ fifth-largest source of imports. Last year, it shipped $148 billion worth of goods to the US, according to Commerce Department data. Cars, car parts and agricultural and construction machinery were among the top goods Americans bought from there.
Meanwhile, the US exported $80 billion worth of goods to Japan last year. Oil and gas, pharmaceuticals and aerospace products were the top exports.
Japan has been in an uncomfortable position, since China is its top trading partner and the Trump administration had been looking to pressure allies to reduce their levels of trade with China to get a trade deal with the US, according to multiple reports.
The latest deal between the US and Japan follows an expanded trade agreement the two countries signed in 2019, which went into effect the subsequent year and allowed for more goods to be shipped duty-free.
This is a developing story. It will be updated.
