Trump signs executive order implementing US-Japan trade agreement

05/09/2025 03:45 AST

US President Donald Trump has signed an executive order implementing the US-Japan trade agreement, the White House said.

"Under the Agreement, the US will apply a baseline 15 per cent tariff on nearly all Japanese imports entering the US, alongside separate sector-specific treatment for automobiles and automobile parts; aerospace products; generic pharmaceuticals; and natural resources that are not naturally available or produced in the US," the executive order said on Thursday.

"Japan, meanwhile, will provide American manufacturing, aerospace, agriculture, food, energy, automobile, and industrial goods producers with breakthrough openings in market access across key sectors," it added.

Japan is working toward an expedited implementation of a 75 per cent increase of US rice procurements and purchases of US agricultural goods in amounts totaling $8 billion per year, according to the executive order.

"This new tariff framework, combined with expanded United States exports and investment-driven production, will help reduce the trade deficit with Japan and restore greater balance to the overall US trade position," the agreement said.

In return, Japan has agreed to expand market access for American goods across key sectors, including manufacturing, aerospace, agriculture, food, energy, automobiles, and industrial products, Xinhua news agency reported.

The agreement provides reciprocal economic benefits aimed at reshaping bilateral trade.

Japan is also working to accept for sale in US-manufactured and US-safety-certified passenger vehicles without additional testing.

Critically, Japan has agreed to invest $550 billion in the US, the executive order claimed.

Trump announced a framework agreement between the US and Japan on July 22, saying it lays the foundation for a new era of US-Japan trade relations grounded in principles of reciprocity and shared national interests.

Under the executive order published by the White House, Japanese autos will face a 15 per cent tariff, down from the current 27.5 per cent, while tariffs on many other goods will also be capped at 15 per cent.

Japan pledged to increase rice imports under its Minimum Access rice scheme and commit to annual purchases of American corn, soybeans, fertiliser, and bioethanol - a package worth about $8 billion.