On Tuesday, former President Donald Trump announced a new trade agreement between the United States and Japan, calling it “the biggest deal ever” on his Truth Social platform. At the core of this agreement are new 15% reciprocal tariffs on all Japanese exports to the U.S. In addition, Trump claimed that Japan would invest $550 billion into the U.S. economy and that America would “receive 90% of the profit.”

The announcement follows weeks of economic pressure and tariff threats aimed at forcing Japan into concessions. Just days earlier, Trump sent a formal notice to Tokyo warning that, without a deal by August 1, all Japanese exports to the U.S. would face a 25% tariff. This came after his earlier proclamation on April 2, during “Liberation Tariff Day,” when he introduced a 24% rate as part of his aggressive trade policy.

The final deal now establishes a 15% tariff rate under what Trump calls a “reciprocal agreement” designed to ensure fair trade conditions between the two countries. According to Trump, Japan has agreed to open its markets to U.S. exporters in sectors such as cars, trucks, rice, agricultural products, and more.

Bizarre Promises, but No Details

While Trump touted the deal as a massive win promising $550 billion in investment and hundreds of thousands of jobs, the White House has provided no official documentation supporting these figures. There is no timeline, breakdown of the investment, job creation plan, or explanation of the “90% profit” claim. This lack of transparency has sparked concern among economists and market analysts.

One particularly sensitive area is the auto industry, a key pillar of Japan’s exports. In 2024, Japanese cars accounted for 28.3% of the country’s total exports. Trump’s new agreement doesn’t remove the existing 25% tariff on vehicles—already applied to all countries—but rather wraps it into a broader framework of reciprocity.

Markets React, but Investors Remain Cautious

Markets responded immediately, albeit modestly:

🔹 Japan’s Nikkei 225 futures in Chicago jumped to 40,185 from a previous close of 39,774.92

🔹 Australia’s S&P/ASX 200 futures rose to 8,681 from 8,677.20

🔹 Hong Kong’s Hang Seng futures increased to 25,321 from 25,130.03

🔹 U.S. indices: S&P 500 futures rose by 0.2%, Dow Jones futures gained 99 points, and Nasdaq 100 futures remained flat

Although there was some market movement, investor sentiment was more cautious than celebratory. Attention has now shifted to the upcoming earnings season, with major updates expected from tech giants like Alphabet (Google) and Tesla after markets close on Wednesday. These will be the first key indicators of performance from large-cap tech firms this season. Earlier in the day, Hasbro is set to report, followed by Chipotle Mexican Grill and Mattel.

What’s Next: Housing Market and Tech Sector in Focus

Beyond corporate earnings, investors are also watching for U.S. housing data, expected Wednesday morning. These figures could offer a clearer view of the housing market’s trajectory—currently considered by some analysts to be the most affordable in years. This data may have an impact on consumer behavior and broader market sentiment in the coming weeks.


#TRUMP , #Japan , #usa , #USPolitics , #Geopolitics

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