On September 4th (local time), U.S. President Donald Trump signed an executive order imposing tariffs of up to 15% on most Japanese products, including automobiles and auto parts. This agreement, which was initially reached in July, was not formalized immediately as negotiations over specific conditions between the U.S. and Japan continued. The executive order aims to prevent additional country-specific tariffs from being applied on top of existing ones.
The 15% tariff is retroactively applied to most imports from August 7th, when President Trump started implementing tariffs on dozens of trading countries. Measures to relieve tariffs on aerospace and automobile imports are expected to take effect within seven days from the order.
Japan has persistently requested the U.S. to reduce automobile tariffs from the current 27.5% to alleviate the burden on its crucial automotive industry. As part of the agreement, the U.S. will eliminate certain tariffs on aircraft, aircraft parts, generic pharmaceuticals, raw materials, and precursor chemicals.
On the other hand, Japan agreed to establish a $550 billion fund in July to invest in the U.S., though specific details have yet to be released. The Japanese government has been pressing to finalize this agreement in recent weeks, and Japan’s chief trade negotiator, Ryosei Akazawa, attended negotiations in Washington this week to discuss the conditions.