Trump finalizes Japan trade deal with 15% tariffs as Ishiba faces discontent from within party

U.S. President Donald Trump signed an executive order Thursday stateside to implement a trade deal with Japan, with 15% baseline tariffs on most Japanese goods, including autos.

The deal had been reached in July after months of negotiations, with Washington and Tokyo continuing to haggle over details for weeks before it was signed.

As part of the deal, Tokyo agreed to invest $550 billion in projects selected by the U.S. government and ramp up its purchase of American agricultural products, such as corn and soybeans, as well as U.S.-made commercial aircrafts and defense equipment.

The U.S. ally in Asia will also offer “breakthrough openings in market access” in the manufacturing, aerospace, agriculture and automobile sectors, the Thursday order said. The agreement reached in July had included Japan purchasing 100 Boeing planes, 75% higher imports of U.S. rice and $8 billion worth of agricultural and crop products.

Washington will apply a baseline 15% tariff on nearly all Japanese imports, with separate sector-specific levies for automobiles and parts (also 15%), aerospace products, generic pharmaceutical goods and natural resources, according to the executive order.

The Thursday order prevents Trump's country-specific tariffs on top of existing levies. The lower tariffs will apply retroactively to Japanese goods “entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern daylight time on August 7, 2025,” the order stated. The tariff relief on automobiles is set to take effect after seven days.

Trump's global tariff campaign has thrown the global supply chain into disarray, in particular Japan's massive auto sector. Last month, warned that it expected a hit of nearly $10 billion as Trump's tariffs on autos weighed on its sales to the U.S., forcing it to slash by 16% its forecast for full-year operating profits.

Tariffs are expected to hit rivals as well, with Ford's pre-tax adjusted profit reportedly set to drop $3 billion while GM projects $4 billion to $5 billion hit for the year.

Japan's top trade negotiator Ryosei Akazawa, who was visiting Washington this week, had delivered a letter from Japan's Prime Minister Shigeru Ishiba inviting Trump to visit his country, Kyoto News reported.