Washington: US President Donald Trump has signed an executive order that reduces tariffs on Japanese car imports from 27.5 percent to 15 percent.
The move has formalised a trade agreement announced in July, covering a wide range of Japanese exports to the US, including automobiles and pharmaceuticals.
The White House has said that the trade deal is designed to lower America’s trade deficit with Japan while creating breakthrough opportunities for US companies. As part of the agreement, Japan has pledged to invest $550 billion in projects across the US, while also allowing greater market access for American goods such as rice and vehicles.
Tokyo has committed to purchasing $8 billion worth of US products annually, including agricultural produce, fertilisers, and bioethanol. It has also agreed to gradually increase imports of US-grown rice by 75 percent, a significant concession from its earlier resistance to safeguard its domestic farmers.
🇺🇸🤝🇯🇵@POTUS has signed an Executive Order officially implementing the U.S.-Japan Trade Agreement. pic.twitter.com/BsmH1x2wGk
— The White House (@WhiteHouse) September 4, 2025
The US has been Japan’s largest export destination, with cars representing around 20 percent of the country’s total exports. The tariff cut to 15 percent is expected to provide relief to major automobile companies like Toyota, Honda, and Nissan, which have faced uncertainty since Washington announced sweeping tariffs earlier this year.
Last month, Toyota estimated that the tariffs would cost the company $10 billion this year alone. The revised levy has been welcomed by industry leaders as a measure that helps maintain competitiveness in the US market.
Japan’s chief negotiator Ryosei Akazawa has also acknowledged the development, noting that the agreement will stabilise trade relations at a crucial time for the global economy. Trump has described the deal as ‘massive’ and emphasised that it benefits both nations equally.
With this agreement, both Washington and Tokyo aim to balance their economic relationship. While the US gains wider access to Japanese markets, Japan ensures long-term stability for its export-driven economy, particularly in the automobile sector. The reduction of Trump tariffs on Japanese cars is being viewed as a critical step toward mitigating trade tensions and securing mutual growth.
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