Donald Trump has announced a “massive” trade deal with Japan, marking a key breakthrough for major US trade partners as they scramble to strike agreements before the end of the month.
In an attempt to slash his country’s colossal trade deficit, the U.S president has vowed to hit dozens of countries with punitive “reciprocal” tariffs if they do not hammer out a pact with Washington by August 1.
The breakthrough makes Japan one of five countries to have signed an agreement along with Britain, Vietnam, Indonesia and the Philippines after Trump promised in April he would get “90 deals in 90 days”.
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made,” he wrote on his Truth Social platform.
He said that under the deal, “Japan will invest, at my direction, $550 billion into the United States, which will receive 90% of the Profits”.
He did not provide further details on the unusual investment plan but said it “will create Hundreds of Thousands of Jobs”.
Japanese exports to the United States were already subject to a 10 percent tariff, which would have risen to 25 per cent on August 1 without a deal.
Duties of 25 per cent on Japanese autos an industry accounting for eight per cent of Japanese jobs were also already in place, plus 50 per cent on steel and aluminium.
Japanese Prime Minister Shigeru Ishiba said that the autos levy had now been cut to 15 percent, sending Japanese car stocks soaring, with Toyota and Mitsubishi up around 14 percent each.
