President Donald Trump has announced what he’s calling the “largest deal ever made” between the United States and Japan. In a post on Truth Social and remarks from the White House, Trump revealed that the agreement includes $550 billion in Japanese investment into the US and sets new 15% tariffs on Japanese goods entering the American market.
In return, Japan will lower barriers to US products like cars, trucks, and rice, areas that have been sticking points in past negotiations. Trump claimed the US will take in 90% of the profits from the deal. “This deal will create hundreds of thousands of jobs,” Trump said, calling it a historic win for American workers and farmers.
Background On US-Japan Trade Relations
The US and Japan have been major trading partners for decades, but their relationship has had its share of disagreements. Japan is currently the fifth-largest exporter to the US, sending over $148 billion in goods last year, including cars and machinery. However, American exports to Japan totaled only $80 billion, resulting in a long-standing trade imbalance.
In the past, US officials have criticized Japan’s restrictions on American rice and low levels of US car imports. Despite Japan buying nearly $300 million worth of US rice last year, Trump recently claimed Japan was blocking US rice exports. Cars have also been a sore point, with Trump stating Japan barely imports American vehicles, though data shows about 17,000 US cars were sold there last year.
Earlier this year, Trump threatened to impose a 30% tariff on Japanese goods; however, those threats were subsequently paused as negotiations progressed. The new agreement builds on a 2019 trade deal between the two countries that reduced some tariffs but left key issues unresolved.
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