US President Donald Trump speaks at the White House, July 31, Washington (©Reuters via Kyodo)
On September 4, President Donald Trump signed an executive order to carry out the United States-Japan trade agreement concluded in July, marking a recalibration of tariff policy between the two allies.
Tariffs on Japanese automobiles and auto parts, currently set at 27.5%, will be reduced to 15% under the new order. The cut is contingent on an administrative review, which Trump instructed federal agencies to complete within seven days of the order's official publication in the Federal Register.
In line with commitments made in the July 22 deal, the order also establishes a new framework for what Washington has termed reciprocal tariffs. Imports from Japan, already facing tariffs of 15% or higher, will not incur additional levies. Meanwhile, other goods currently subject to lower rates will be capped at 15%.
The new tariff rules are expected to apply retroactively to Japanese products that arrived in the US on or after 12:01 AM on August 7, Washington time.
More Negotiations Ahead
The timing of the latest order underscored the stakes in ongoing trade negotiations. It was issued just hours after Japan's chief tariff negotiator, Ryosei Akazawa, arrived in Washington for his tenth round of talks with Trump's trade team.
Over the past several weeks, Tokyo has pressed Washington for assurances that auto tariffs will be reduced as planned and that reciprocal duties will not be stacked on top of existing ones.
The latest order also highlights Japan's commitment to invest $550 billion USD in the US. For Trump and his administration, this is a centerpiece of the July agreement.
While both governments broadly frame the investment as a means of revitalizing critical sectors, the precise allocation and project details remain to be determined.
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Author: Kenji Yoshida
