Trump signs order to cut tariffs on Japanese cars to 15%
September 5, 2025 12:02 pm
US President Donald Trump signed an executive order on Thursday that cuts tariffs on Japanese car imports from 27.5% to 15%, easing uncertainty for motor industry giants like Toyota, Honda and Nissan.
It formalises an agreement, which was announced in July, to apply a 15% levy to almost all Japanese exports to the US - including vehicles and pharmaceuticals.
Tokyo has also agreed to invest $550bn (£410bn) in US projects, and gradually open its economy to American goods, including cars and rice, the White House said.
The deal came after months of negotiations between the US and Japan in the wake of Trump announcing sweeping tariffs on most countries around the world in April.
“Finally,” Japan’s top trade negotiator, Ryosei Akazawa, said in Japanese as he reposted a White House announcement about the executive order.
According to the order, the deal will help reduce America’s trade deficit with Japan and provide US businesses “breakthrough openings”.
The White House said Japan has committed to buying $8bn worth of US goods a year - including agricultural products, fertilisers and bioethanol.
It added that Tokyo has also agreed to gradually increase its purchases of US-grown rice by 75% - a concession it had previously resisted to protect its agricultural industry.
Trump hailed the agreement as “massive” when it was announced in July.
“It’s a great deal for everybody. I always say it has to be great for everybody. It’s a great deal,” he said in a news conference.
The Japanese economy is reliant on selling goods abroad, with the US as its biggest export market.
Cars account for around 20% of the country’s total exports.
Trump’s tariffs, which came into effect in August, have sent shockwaves around world as governments and businesses adapt to the changing global market.
Last month, Toyota warned that the impact of US tariffs would cost it around $10bn this year.
Shares in Japanese carmakers and parts suppliers rose on Friday in Tokyo after the executive order was signed.
Source: BBC
- Agencies
