Donald Trump has announced that the United States has sealed a trade deal with Japan. In what he described as the “largest deal ever”, the trade agreement will have 15% reciprocal tariffs levied on all Japanese exports to the United States. The news was shared by Donald Trump on Truth Social, and is coming after weeks of tariff threats.
According to Donald Trump, Japan will inject $550 billion into the U.S. economy under this new agreement. He also claimed the U.S. would “receive 90% of the Profits.” The announcement, made from Washington, comes just days after Trump sent a formal tariff notice to Japan, warning that starting August 1, exports to the U.S. would be hit with a 25% tariff if no agreement was reached.
The letter is coming after Trump revealed a 24% rate in what he called “Liberation Day” tariffs. The goal of the move was clear: pressure Japan to offer more trade concessions or face higher penalties. The statement on Tuesday confirmed that the tariff will now be set at 15% as part of a reciprocal deal.
Trump inks trade deal with Japan as markets respond
Trump also added that Japan will open up its markets “to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things.” He added that the deal would lead to the creation of “Hundreds of Thousands of Jobs.” However, no timeline or breakdown was provided for either the investment or projected jobs. The White House has yet to release any official documentation showing how the $550 billion investment will be managed.
The automobile sector has been one of Japan’s most important export engines. In 2024, Japanese car shipments represented 28.3% of the country’s total exports. Under current rules, Japanese automobiles shipped into the U.S. already face a 25% tariff, the same as applied to all other countries. Trump’s new deal doesn’t remove that number but repackages it under a broader reciprocal framework.
The markets immediately reacted to the news. Futures for the Nikkei 225 in Chicago jumped to 40,185, compared to the index’s last close at 39,774.92. In Australia, the S&P/ASX 200 futures climbed to 8,681, slightly above the previous close of 8,677.20. Hong Kong’s Hang Seng futures also edged up to 25,321, improving from 25,130.03.
In the United States, S&P 500 futures moved up 0.2% by Tuesday evening after the news broke. Dow Jones futures rose 99 points, or 0.2%, while Nasdaq 100 futures hovered near the flatline. The broader investor reaction reflected interest, not celebration. Alphabet and Tesla are expected to report on Wednesday after the market closes.
These will be the first major updates from megacap tech companies this earnings season. Traders are watching closely, since tech has led the rally for years. Beyond corporate earnings, economic data is also on the docket. According to a report by Cryptopolitan, traders are now looking ahead to existing home sales data due Wednesday morning, which could offer a clearer view of the housing market’s direction, which is now more unaffordable than ever.
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