US President Donald Trump on Wednesday announced that the US and Japan have made ‘the largest Deal ever’, with Japan investing $550 billion in the US and America receiving 90% of the profits.
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits,” Trump said in a post on Truth Social.
Trump said the deal includes reciprocal tariffs set at 15 percent on Japanese imports and requires Japan to open its markets to American products, including cars, trucks, rice, and certain agricultural goods.
“This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%. 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. Thank you for your attention to this matter!” Trump added in the post.
According to CNN, the agreement marks a breakthrough after months of stalled negotiations with key trading partners, as Trump’s August 1 deadline for higher tariffs approached. The Japan deal was one of three major trade developments Trump announced that day.
CNN noted that Japan is one of the US’s most significant trading partners and the fifth-largest source of imports. Last year, Japan shipped $148 billion worth of goods to the US, including cars, car parts, and agricultural and construction machinery.
Goods from Japan had faced a 24% reciprocal tariff before Trump initiated a 90-day pause in April. Since then, they have been subject to a minimum 10% tariff. Earlier this month, Trump warned in a letter to Prime Minister Ishiba that he could impose a 30% tariff starting August 1, CNN reported.
In return, the US exported $80 billion worth of goods to Japan last year, including oil and gas, pharmaceuticals, and aerospace products.
While Japan is a close ally of the US, its top trading partner is China. CNN reported that the Trump administration had been urging its allies to reduce trade with China as a condition for securing trade deals with Washington.
The agreement follows a 2019 expanded trade pact between the two countries that went into effect the following year, allowing more goods to be shipped duty-free. Japan also holds $1.1 trillion in US Treasury securities, making it the largest foreign creditor to the United States.
(With ANI Inputs)
