With an Aug. 1 deadline approaching, the United States has reached a trade agreement with Japan, U.S. President Donald Trump announced on social media on Tuesday.
“I just signed … maybe the largest deal in history,” Trump said at the White House.
“We worked on it long and hard, and it’s a great deal for everybody. A lot different from the deals in the past, I can tell you that,” Trump said. Across his political career, Trump has often criticized the trade arrangements between the United States and its allies, among them Japan.
In a post on Truth Social, Trump revealed some details of the agreement.
As a part of the deal, Japan will open to U.S. trade on items like cars and trucks, rice, other agricultural products, “and other things.”
The East Asian nation will also pay reciprocal tariffs to the United States at a rate of 15 percent. Trump had threatened an increase to 25 percent if Japan didn’t come to an agreement before the Aug. 1 deadline.
Industry and government officials with knowledge of the agreement said the deal gives Japan one major win, lowering the tariff on Japanese automobiles by 10 percent, cutting the rate from 25 percent to 15 percent. Japanese cars include some of the most popular manufacturers in the United States, including companies such as Toyota, Honda, and Nissan.
Japan will invest $550 billion in the United States, “which will receive 90% of the Profits” from those investments, Trump said.
“This Deal will create Hundreds of Thousands of Jobs—There has never been anything like it,” he wrote.
“This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan,” Trump said.
The trade deal comes as Japan faces an uncertain political future.
On Sunday, Japanese Prime Minister Shigeru Ishiba’s party lost control of the upper house of the Japanese government, after losing control of the lower house in October. Voters were driven in part by fears about the impending trade deadline.
On Wednesday, Ishiba acknowledged the trade deal, saying it would benefit both nations.
It’s unclear what’s next for the politically split government following the deal.
At a Tuesday dinner, Trump said that negotiations with the European Union (EU) will be held in Washington on Wednesday.
“We have Europe coming in tomorrow, the next day,” Trump told guests.
Earlier this month, Trump sent a letter to EU nations threatening the 27 member states with 30 percent taxes on their goods starting Aug. 1 if no agreement is reached.
US–Indonesian Trade Agreement
Earlier on Tuesday, following through on last week’s announcement, Trump confirmed the details of the U.S.–Indonesia trade agreement.
Under the deal, Indonesia will lower tariffs to zero percent on 99 percent of U.S. exports and eliminate non-tariff barriers, the president said in a Truth Social post on Monday.
Indonesian products entering the United States would be subject to a reciprocal tariff rate of 19 percent, down from the previously announced blanket rate of 32 percent.
Indonesia will also supply the United States with precious critical minerals and purchase American farm products, energy, and Boeing aircraft
“This deal is a huge win for our automakers, tech companies, workers, farmers, ranchers, and manufacturers,” Trump said.
The deal also removes import restrictions and licensing agreements and establishes measures to resolve long-standing intellectual property issues. The two sides will further finalize commitments on digital trade, services, and investment.
Indonesia will, as part of the trade deal, implement a ban on forced labor imports and eliminate rules that restrict unions and collective bargaining rights.
The agreement is projected to be worth approximately $50 billion to the United States, the White House confirmed.
Leaders from Indonesia agreed to several significant commitments, including the removal of pre-shipment inspections, exemption from local content requirements for U.S. firms, and acceptance of U.S. federal motor vehicle safety standards.
Additionally, the deal will include transshipment rules to ensure that China does not exploit the agreement’s benefits.
According to the White House, transshipped goods with high levels of content from nations with higher tariff rates would face a 40 percent levy.
US Finalizing Deal With the Philippines
The latest details of the U.S.–Indonesia trade agreement come as Trump confirmed that the Philippines is next in line to finalize a deal.
After welcoming Philippines President Ferdinand Marcos Jr. to the White House on Tuesday, Trump announced on Truth Social that the Southeast Asian country will open its market to U.S. products with zero percent tariffs. In exchange, Filipino exports to the United States will face a 19 percent levy, slightly lower than the 20 percent proposed in Trump’s letter earlier this month.
“It was a great honor to be with the president. He is highly respected in his country, as he should be. He is also a very good, and tough, negotiator. We extend our warmest regards to the wonderful people of the Philippines!” Trump wrote on his social media platform.
The deals with Indonesia and the Philippines mark the second and third deals between the United States and its trading partners after Trump sent letters to dozens of countries ahead of the Aug. 1 deadline.
Next Up: China
Meanwhile, Treasury Secretary Scott Bessent stated on Tuesday that the Aug. 12 trade deadline with China is likely to be extended.
“I think trade is in a very good place with China,” Bessent said in an interview with Fox Business.
“So I think we’ve actually moved to a new level with China, where it’s very constructive,” he continued. “We’re going to be able to get a lot of things done, now that trade has kind of settled in at a good level.”
Bessent also noted that the administration wants to discuss sanctioned Iranian and Russian crude oil and slow the “glut of manufacturing that they’re doing and concentrate on building a consumer economy.”
Swedish Prime Minister Ulf Kristersson confirmed on X that his country would host the next round of negotiations between the world’s two largest economies. Commerce Secretary Howard Lutnick, speaking with CBS’s “Face the Nation” on Sunday, stated that the United States plans to impose a baseline 10 percent tariff on small countries in Latin America, the Caribbean, and Africa.
Andrew Moran has been writing about business, economics, and finance for more than a decade. He is the author of “The War on Cash.”
Joseph Lord is a congressional reporter for The Epoch Times.
Reprinted with Permission from The Epoch Times – By Andrew Moran & Joseph Lord
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
Read the full article here