Trump announces sweeping Japan trade deal with $550B investment by Tokyo

Valletta · Tuesday at 10:25 PM

“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,” Trump, 79, wrote on Truth Social.
“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%.”

Trump announces sweeping Japan trade deal with $550B investment by Tokyo

President Trump announced Tuesday that his administration had wrapped up a massive trade agreement with Japan, two weeks after threatening the US ally with 25% tariffs.

nypost.com

So much for the naysayers.

wing2000 · Tuesday at 11:09 PM

...a deal is not a deal until it's signed off.

Hint: A trade framework announced by one party is not a done deal.

Valletta · Wednesday at 1:30 AM

wing2000 said:
...a deal is not a deal until it's signed off.

Hint: A trade framework announced by one party is not a done deal.

"We were the first in the world to achieve tariff reductions on autos and auto parts with no quantity limits," Ryosei Akazawa said after the latest round of trade talks in Washington. The reduction in auto tariffs--a major issue for Japan--forms part of a trade deal with the U.S. that Akazawa said is mutually beneficial.

https://www.morningstar.com/news/dow-jones/2025072210968/japan-scores-trade-win-as-us-agrees-to-lower-auto-tariffs

Richard T · Wednesday at 4:07 PM

Valletta said:
“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,” Trump, 79, wrote on Truth Social.
“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%.”

Trump announces sweeping Japan trade deal with $550B investment by Tokyo

President Trump announced Tuesday that his administration had wrapped up a massive trade agreement with Japan, two weeks after threatening the US ally with 25% tariffs.

nypost.com

So much for the naysayers.

So we get 15% tariff rates in japan with some fuzzy investment. How is it that the USA will receive 90% of the profit? I mean who invests that kind of money and then turns over the profit? (assuming their is any). This is almost a reasonable rate but it certainly will make all cars more expensive. A relief though cause most were thinking it would be more.

Sure does seem like Trump loves side agreements even if they are unenforceable and vague. It gives him more talking points I guess and while I think some of them will turn out good. However, this is not the free market making decisions on investment. Instead, it is more use of a command economy, whereby countries trade favors that may often benefit certain insiders, a sort of de facto politburo that is unaccountable to voters.
One talking point was that japan will buy more USA rice. It is a small point but most Japanese do not like long grain rice. I imagine we can sell some more though to be used in cereals, cookies and candies where it can not really be noticed.
This announced agreement sets the bar for other nations. Most seem to be looking at 20% unless they are either hated, or too successful at exporting what we need. (Canada and EU)

ThatRobGuy · Wednesday at 4:55 PM

The numbers themselves sound nice on paper, but I'm curious...

When they say "open to trade, including cars", I hope Trump's team isn't heavily banking on the Japanese chomping at the bit buy American vehicles when they already have easy, tariff-free, access to Honda and Toyota (two of the most reliable car brands on the planet)

Point of reference, Japanese brands sell over 4 million cars a year in the us (1.5 million of them are the result of exports vs. domestic production) -- ultimately leading to over 40% of the vehicles on the road in the US being from Japanese brands.

Meanwhile, <2% of cars in Japan are from American brands (only 5% of the cars on the road in Japan come from another country)

...why would they? Honda and Toyota are two of the best, most reliable brands in the world. -- (and they also have Lexus, Acura, and Infinity for the more upscale market if that's what someone over there wants)

The US car makers aren't happy about the deal either.

https://www.barrons.com/articles/trump-stock-toyota-japan-ford-gm-8756f7b8

https://www.cnn.com/2025/07/23/business/detroit-automakers-object-to-japan-trade-deal

Likely because a lot of the US cars brands are built and assembled in Canada and Mexico, and they're not getting the same favorable vehicle trade deal. The US automakers already have a hard enough time competing with the Japanese brands (both in terms of cost and dependability) without that extra cost added on.

There's a reason why, despite having UAW family members, and trying to be a "Buy American" guy for years, I went with a new Accord Sport Hybrid last year when it was time to get a new car.

At a certain point, people get tired of overpaying for moderately equipped vehicles that are 10 years behind the rest of the world in technology, and become maintenance nightmares at 70k miles.

Trogdor the Burninator · Wednesday at 9:00 PM

Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks

Good luck selling stupidly oversized American trucks to the country that invented the Kei car. Trump got played. Again.

Valletta · Wednesday at 9:05 PM

Trogdor the Burninator said:
Good luck selling stupidly oversized American trucks to the country that invented the Kei car. Trump got played. Again.

A lot of liberals here buy the SUVs and trucks.

NxNW · Wednesday at 9:22 PM

Good luck selling rice to Japan! We'll sell ice to Inuits as well, I'm sure.

Pommer · Thursday at 4:36 AM

NxNW said:
Good luck selling rice to Japan! We'll sell ice to Inuits as well, I'm sure.

Actually rice is in short supply in Japan right now!

GoldenBoy89 · Thursday at 8:24 AM

Valletta said:
A lot of liberals here buy the SUVs and trucks.

Whether liberal or conservative, we’re still Americans brainwashed by decades of auto industry propaganda selling us bigger and less efficient cars because well, that’s just ‘MURICA.

Japan is an entirely different culture.

Nithavela · Thursday at 8:30 AM

NxNW said:
Good luck selling rice to Japan!

Japan does not produce enough rice to fill it's domestic demand and heavily imports it.

Japan Rice imports by country | 2023 | Data

Valletta · Thursday at 8:31 AM

GoldenBoy89 said:
Whether liberal or conservative, we’re still Americans brainwashed by decades of auto industry propaganda selling us bigger and less efficient cars because well, that’s just ‘MURICA.

Japan is an entirely different culture.

Not me, I'm a conservative and have an extremely fuel efficient vehicle.

GoldenBoy89 · Thursday at 8:36 AM

Valletta said:
Not me, I'm a conservative and have an extremely fuel efficient vehicle.

I meant in general. The most popular car sold in the US is the Ford F-150. The most popular car sold in Japan is the Honda N-Box - a mini wagon type car.

NxNW · Thursday at 8:43 AM

GoldenBoy89 said:
The most popular car sold in the US is the Ford F-150.

On a 9-year note at 11% interest, because Murica!

trophy33 · Thursday at 9:18 AM

Wall Street was left a bit confused by the terms of the deal.

Andy Laperriere, head of U.S. policy research at Piper Sandler, said Japanese officials are “describing it differently” when it comes to the investment plan. Japan’s leaders, he said, see the $550 billion figure as a cap and inclusive of government loan guarantees.

“Especially given that the Japanese believe they are being bullied into this commitment, they will almost certainly slow walk whatever investments they don’t think are in their own economic self-interest,” Laperriere wrote to clients in a Wednesday note.

https://www.cnbc.com/2025/07/23/trumps-japan-trade-deal-card-was-altered-by-hand.html

trophy33 · Thursday at 9:22 AM

The agreement drew criticism from American carmakers who argued that the deal gave preferential treatment to Japanese imports.

“Any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles… is a bad deal for US industry and US auto workers,” said Matt Blunt, president of the American Automotive Policy Council.

Tariffs on vehicles made in North America remain at 25 per cent.

Key things to know about Trump’s ‘massive’ Japan–US trade deal

Agreement commits Tokyo to investing $550bn in America and Washington to cutting tariffs on Japanese automobiles to 15 per cent

www.independent.co.uk

Trogdor the Burninator · Thursday at 6:19 PM

Valletta said:
A lot of liberals here buy the SUVs and trucks.

I'm sure American Liberals do. But we're talking about Japan. Where the top selling car for the past 3 years is the 660cc, 3.3m long Honda N-Box.

Trogdor the Burninator · Thursday at 6:24 PM

trophy33 said:
The agreement drew criticism from American carmakers who argued that the deal gave preferential treatment to Japanese imports.

“Any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles… is a bad deal for US industry and US auto workers,” said Matt Blunt, president of the American Automotive Policy Council.

Tariffs on vehicles made in North America remain at 25 per cent.

Key things to know about Trump’s ‘massive’ Japan–US trade deal

Agreement commits Tokyo to investing $550bn in America and Washington to cutting tariffs on Japanese automobiles to 15 per cent

www.independent.co.uk

The truly hilarious part of this deal is that Japan can export vehicles to the US made with un-tariffed aluminum and steel, while US auto makers have to pay massive tariffs on the same materials, plus pay again on imported parts like transmissions and electronics. Oh - and US brands manufactured in Mexico and Canada? - full tariffs. And US exports to Japan (leaving aside the size issue) take those extra costs with them, making them less competitive.

It's actually hard to conceive of a worse scenario for the US auto industry, while Trump's deal allows Japan low tariff, unrestricted imports into the US. But hey, Trump made the deal, so his supporters will fall into line.

Gene2memE · Thursday at 7:30 PM

Trogdor the Burninator said:
I'm sure American Liberals do. But we're talking about Japan. Where the top selling car for the past 3 years is the 660cc, 3.3m long Honda N-Box.

The idea that the Japanese will start buying US-made SUVs or trucks in any significant volumes is laughable.

Japanese roads are not set-up to handle them. Japanese garages are not large enough to fit them.

Japanese tax laws are also punitive when it comes to larger, heavier and less fuel efficient cars.

There's three different vehicle taxes (annual automotive tax, automobile weight tax and environmental performance tax). Without going into all of the details, something like a full-sized SUV or truck (think Ford F150 or Explorer) is going to attract a tax burden that will be anywhere from 8 to 25 times that of something like a Toyota Yaris or a Kei car. It's going to be 2 to 6 times that of a 'full sized' Japanese car like a Toyota Crown or or Honda Accord.

Congratulations, you played yourselves.

Trump announces sweeping Japan trade deal with $550B investment by Tokyo

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