Japan and the United States reach consensus on “massive” trade agreement

U.S. President Donald Trump revealed a new trade deal with Japan in a long-awaited announcement, saying it was a “huge” victory for both countries. Japanese Prime Minister Shigeru Ishiba confirmed the news the next morning. He welcomed the deal, saying it was “the lowest number in a country with the U.S. surplus to date”.

The deal marks a major shift in bilateral trade, but Japan has no cost. While the agreement eased immediate trade tensions, Japan made several high-value offers in exchange for relatively limited tariff relief.

Prices rise

At the heart of the deal is tariff rollback: Japanese automakers have been performing their 25% duty and will now face a 15% tax rate. Ishiba actively describes the deal, but the reduced tariffs still represent a significant burden compared to previous trade terms. By comparison, A recent US PR agreement Set a 10% cap for a limited number of UK vehicles.

The United States has not made any firm commitments other than tariffs. Japan, on the other hand, agreed to invest $550 billion in U.S. industries such as AI, semiconductors, shipbuilding and clean energy, aiming to deepen bilateral relations, but also relaxed Washington’s economic security issues.

Strategic gains under imbalanced conditions

The deal also includes guarantees that Japan will not be treated adversely in future tariffs on sensitive goods such as pharmaceuticals and advanced technologies. In agriculture, Japan also agreed to buy more U.S. rice in its existing 770,000-ton import quota.

Japan’s chief negotiator and Minister of Economic Revitalization Ryosei Akazawa held his final round of talks in Washington this week. After meeting with U.S. officials, he posted on X “The Mission is Completed.”

The market welcomes news. this Nikkei 225 jumped 1,300 pointssurpassing the 41,000 mark for the first time in a year, with automakers leading the surge.

Despite concerns about fairness, the deal is Japan’s “the best compromise at this stage at this stage,” Shigeto Nagai of research firm Oxford Economics told BBC News.

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