US strikes landmark trade deal with Japan ahead of tariff deadline

President Donald Trump has reached a major trade deal with Japan that will impose a 15% tariff on Japanese imports, including automobiles, while establishing a $550 billion investment fund for US-based projects. The agreement averts a previously planned 25% tariff. The deal introduces a unique investment mechanism, resembling a sovereign wealth fund, designed to channel Japanese capital into American industries, such as semiconductors and infrastructure.

In addition to tariff relief, Japan will increase purchases of US agricultural products and eliminate additional safety checks on imported US cars—steps aimed at improving market access for American goods. The deal does not address current US tariffs on Japanese steel and aluminum, which remain at 50%.

The agreement is part of a broader push by the Trump administration to finalize trade deals ahead of a looming August 1 deadline, when more sweeping tariffs are set to take effect. Negotiations are still ongoing with the EU and other key partners, while Trump has announced preliminary deals with several countries, including the UK and Vietnam.