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Historic Trade Agreement Reached
The United States and Japan have finalized a major trade agreement establishing mutual 15% import tariffs just one week before the August 1 deadline that would have triggered 25% tariffs. This breakthrough resolves months of tense negotiations that threatened to escalate into a full trade war between the two economic powers.
Key Agreement Terms
President Trump hailed the deal as "the largest trade agreement in history," noting Japan will open its market to US automobiles, trucks, rice and agricultural products. Japan committed to approximately €468 billion in US investments expected to create hundreds of thousands of jobs. Prime Minister Ishiba confirmed the framework during an emergency Tokyo press conference, though detailed provisions remain undisclosed.
Economic Impact
Japan's auto sector, already damaged by 25% tariffs imposed since April, faces continued challenges. Economist Nobuhiro Kiuchi warns the 15% tariff could still shrink Japan's economy by 0.5%. The Nikkei stock index surged over 1200 points following the announcement, while the yen strengthened to 146 per dollar.
Controversial Concessions
Japan agreed to increase US rice imports within existing regulatory frameworks to protect domestic agriculture. The US pledged not to impose higher tariffs on Japan than other nations for critical products like semiconductors and medicines. However, 50% steel and aluminum tariffs remain unchanged.
Political Repercussions
Public reaction in Japan remains divided. While businesses welcome avoided escalation, opposition leader Kenta Saito demands parliamentary review, claiming concessions threaten national interests. Prime Minister Ishiba reportedly plans to resign this month following the agreement's completion and recent electoral setbacks for his party.
