Trump announces massive trade agreements with Japan

Trump announces massive trade agreements with Japan

President Donald Trump announced a long -awaited trade agreement with Japan on Tuesday evening. This framework agreement between allies and large trading partners seemed unreachable a few weeks ago.

Details on the trade agreement

"We have just completed an enormous business with Japan, maybe the biggest business that has ever been done," said Trump to truth social . As part of the agreement, US importers will pay a “mutual” tax of 15 % to Japanese goods that are exported to the United States. Japan will also invest $ 550 billion in the United States, said the President.

forecasts for the labor market

Trump added that the USA will be "received 90 % of the profits". However, he did not give any details on how these investments work or how the profits are calculated. No official term sheet was published. "This agreement will create hundreds of thousands of jobs - there has never been anything like that. Perhaps the most important thing is that Japan opens its country for trade, including cars and trucks, rice and certain other agricultural products", posted Trump .

negotiations and challenges

Shortly after the publication of his postings, Trump opened a speech in the Baltic Hall of the Presidency to mark the trade agreement with Japan. "I signed the largest trade agreement in history. I think it may be the greatest agreement in history with Japan," said Trump during a reception with Republican members of the Congress.

"Your best people were here and we worked for a long time and hard. And it's a great business for everyone," he added.

challenges in the negotiation process

Despite the tense negotiations, Trump described the agreement as "a very exciting time for the United States, especially because we will continue to have a great relationship with the country of Japan". At the end of the last month, Trump emphasized travel sales as a point of dispute between the two countries.

"You don't want to have our rice, even though you have a massive rice emergency", Trump said in a Post Truth social. Last year, Japan bought rice worth $ 298 million from the USA, according to the commercial data of the US Census Bureau.

The automotive sector as the dispute point

But the automotive sector - a cornerstone of the Japanese economy - was also a controversial point in the negotiations. Trump had repeatedly said that Japan did not import US cars. "We didn't give you a single car in 10 years," he said at the beginning of this month. According to the Japan Automobile Importers Association, Japan imported 16,707 units of American automobiles last year

But US Finance Minister Scott Bessent met with the Japanese Prime Minister Shigeru Ishiba in Tokyo and posted on X that he was optimistic to reach an agreement - a sign of possible relaxation in the recent tensions. "Good business is more important than a hasty business, and a trade agreement between the United States and Japan remains advantageous for both sides," says Bessent.

Japan as an important trading partner

In contrast to some other recently announced agreements, such as with Indonesia and the Philippines, Japan is an important trade partner of the United States. Japan is the fifth largest source of US imports and last year provided the value of $ 148 billion in the USA, according to the Ministry of Commerce. Cars, auto parts as well as agricultural and construction machines are among the most important products that Americans buy there.

were from Japan briefly faced a 24 % "mutual" tax before Trump took a 90-day break in April. Since then, the goods have been subject to a minimal tax of 10 %. At the beginning of July, Trump sent a letter to Japanese Prime Minister Shigeru Ishiba, in which he threatened a 30 % tax from August 1st. In the meantime, the United States exported $ 80 billion to Japan. Oil and gas, pharmaceuticals as well as aerospace products were the main export goods.

Japan was found in an uncomfortable situation because China is the biggest trading partner and the Trump administration has put pressure on its allies to reduce their trade levels with China to achieve a trade agreement with the USA, as several reports showed.

an extended trade agreement

The current agreement between the USA and Japan follows an extended trade agreement that signed the two countries in 2019 and which came into force the following year and allowed more to ship more. Japan had some influence on the USA beyond the trade agreement: the country is America's Greatest Foreign believers. Japan holds $ 1.1 trillion in US state bonds that are used more massively and increasing debt to finance America.

This story continues to develop and is updated.