The President of the United States, Donald Trump, has reached a trade agreement with Japan that reduces tariffs on automobile imports and prevents Tokyo from imposing tariffs on American products. The agreement also stipulates that the American ally will invest $550 billion in the U.S.
The Japanese automotive sector, which accounts for more than a quarter of exports to the U.S., will see its current tariffs reduced from 27.5% to 15%. The taxes that were set to come into effect on other Japanese products starting August 1 will also be reduced from 25% to 15%.
“I just signed the largest trade deal in history with Japan”, Trump said on his social media platform ‘Truth Social’. “This is a very exciting time for the United States of America, especially because we will continue to have a great relationship with Japan”, added the U.S. president.
The agreement reached between the U.S. and Japan is more significant in a series of agreements that Trump has secured since he unveiled comprehensive global tariffs in April, although, as with other agreements, the exact details remain unclear. However, the agreement now announced renews the prospect of a deal soon between the U.S. and the European Union.
