US President Donald Trump on Tuesday announced a “massive” trade deal with Japan, including a tariff rate of 15 percent, as a deadline looms for other major US trade partners to strike agreements before the end of this month.
Trump also agreed to reduce threatened tariffs on the Philippines, but only by 1 percentage point, after what he termed a successful meeting with Philippine President Ferdinand Marcos Jr.
In an attempt to slash his country’s colossal trade deficit, Trump has vowed to hit dozens of countries with punitive “reciprocal” tariffs if they do not hammer out a pact with Washington by Friday next week.
Photo: Reuters
The Japan agreement, along with another pact with the Philippines, means Trump has now secured five agreements.
The others were with the UK, Vietnam and Indonesia, which the White House on Tuesday said would ease critical mineral export restrictions.
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made,” Trump wrote on Truth Social.
Photo: AFP
He said that under the deal, “Japan will invest, at my direction, US$550 Billion Dollars into the United States, which will receive 90 percent of the Profits.”
He did not provide further details on the plan, but said it “will create Hundreds of Thousands of Jobs.”
Japanese exports to the US were already subject to a 10 percent tariff, which would have risen to 25 percent on Aug. 1 without a deal.
Duties of 25 percent on Japanese vehicles — an industry accounting for 8 percent of Japanese jobs — were also already in place, plus 50 percent on steel and aluminum.
Japanese Prime Minister Shigeru Ishiba yesterday said that the autos levy had been cut to 15 percent, sending Japanese automaker stocks soaring.
The Nikkei 225 rose 3.5 percent.
“We are the first [country] in the world to reduce tariffs on automobiles and auto parts, with no limits on volume,” Ishiba told reporters.
“By protecting what needs to be protected, we continued the negotiations with an aim to reach an agreement that meets the national interest of both Japan and the United States,” he added.
However, Japanese Minister of State for Economic and Fiscal Policy Ryosei Akazawa, who secured the deal in Washington, said that the 50 percent tariffs on steel and aluminum would remain.
Akazawa also said increased defense spending by Japan was not part of the agreement.
Trump also said that levies on the Philippines would be cut by 1 percentage point to 19 percent after hosting Marcos.
Welcoming Marcos to the White House, Trump called him a “very tough negotiator” and said: “We’re very close to finishing a trade deal — a big trade deal, actually.”
“It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs,” Trump wrote on Truth Social.
The 19 percent rate is still above the 17 percent threatened by Trump in April.
Marcos’ press secretary Claire Castro told a news conference in Manila yesterday that the Philippine president had confirmed Trump’s zero tariffs statement, but only for “certain markets.”
Castro also downplayed the potential effects of a tariff regime, saying that just 16 percent of the country’s exports go to the US, with about two-thirds being electronic components not subject to the levies.
“To put it plainly, it has an impact on the country, but not that much,” she told reporters.
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