Trump Announces Trade Deal with Japan
President Trump just announced another trade deal, this one with Japan. The “massive deal” includes Japan investing $550 billion dollars into the U.S. and a tariff rate of 15% on U.S. imports of Japanese goods.
Here’s the president’s announcement of the deal on Truth Social:
We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. 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%. This is 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. Thank you for your attention to this matter!
Greg Wehner and Stephen Sorace reported additional details in a Fox Business article:
On Wednesday, a White House official confirmed to Fox News that under the trade deal Japan would buy 100 Boeing planes, boost rice purchases by 75%, buy $8 billion in agricultural and other products, and hike defense spending with U.S. firms to $17 billion annually, up from $14 billion.
In a blog post last week, I ranked this deal as unlikely to happen before August 1st based on wide reporting around its negotiations. This week has seen virtually a full reversal of that post: not only did the unlikely trade deal with Japan happen, but the India trade deal that I ranked as likely looks much less likely this week.
The only thing that might remain the same from that blog is a trade deal with the EU before the first is iffy. However, it’s widely reported that the EU is now eyeing a deal similar to this new one the Trump Administration has made with Japan. There’s more optimism out there about that deal happening before the August deadline. However, the EU is also preparing countermeasures in case no deal happens by August 1st and U.S. tariffs increase on EU goods.
According to Politico, a vote from EU leaders to finalize tariffs on €93 billion worth of U.S. goods is due tomorrow.
