Trump Signs Order Lowering Tariffs on Japanese Autos Following Months of Negotiations

WASHINGTON/TOKYO, Sept. 4 (Reuters) – U.S. President Donald Trump signed an executive order on Thursday to lower tariffs on Japanese automobile imports and other products, a decision that aims to provide relief to Japan‘s economy as it relies heavily on exports.

The 15% tariffs, reduced from 27.5%, will take effect seven days after the order’s official publication. This move follows months of negotiations, reducing uncertainty in Japan’s automotive sector since the tariffs were first announced in July.

Besides the automotive tariffs, the order confirmed a $550 billion agreement for Japanese investment in U.S. projects. This includes enhanced purchases of U.S. agricultural goods, such as corn and soybeans, totaling $8 billion per year, and no tariffs on commercial airplanes and their parts.

Ryosei Akazawa, Japan’s chief trade negotiator, expressed gratitude for the executive order on social media, referring to it as a “steady implementation of the agreement reached on July 22.” He noted the significance of his tenth trip to the U.S. to finalize these discussions.

U.S. Commerce Secretary Howard Lutnick highlighted the historical nature of the agreement, quoting Akazawa in confirming the tangible benefits for both nations.

Automakers in Japan, notably Toyota, have been feeling the financial impact of previous tariffs, reporting nearly a $10 billion hit to profits. Toyota acknowledged the clarity provided by the new framework regarding trade. Nearly 80% of its vehicles sold in the U.S. are manufactured in North America.

The deal also reflects a wider context, as South Korea is awaiting an executive order for a similar arrangement that will see its U.S. imports facing reduced tariffs as well.

As part of the larger agreement, Japan pledged to purchase 100 Boeing planes and increase its defense equipment procurement from the U.S. by billions of dollars. A memorandum detailing these investments focuses on sectors such as technology and energy, aimed to be fulfilled by January 2029.

The executive order stipulates that this could be modified if Japan fails to uphold its commitments under the trade agreement.

Prime Minister Shigeru Ishiba faces internal pressure regarding the trade deal as his ruling party prepares for a potential leadership election. Analysts suggest this agreement may help his position but predict challenges remain due to rising living costs affecting voter sentiment.