TMTPOST -- U.S. President Donald   Trump on Tuesday touted a "massive"   with   Japan   that   is   going   to   set   reciprocal   tariffs   on   the Asian ally at a relatively lower   rate   and secure hundreds of billions   of dolars ’   investments   in his country.

Credit：Ryosei Akazawa's X Post

"We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump wrote in a post   on   his social media platform Truth Social. "Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.   "   He said the deal   includes   a 15% reciprocal tariffs on Japan   and expected that the deal   to create   " Hundreds of Thousands of Jobs — There has never been anything like it."  

Besides   massive   investments, Trump believed what   seems to be   most   important   is   that   Japan will open up its market to U.S. cars   and agricultural   products   including the rice. "Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things,"   he wrote in the post.

Japanese top trade negotiator Ryosei Akazawa   shortly after Trump ’ s post said "#Mission Accomplished" in a post on X. Akazawa,   head of Japan ’ s Economic Revitalization Ministry, last Saturday forwarded a post from U.S. Treasury Secretary Scott Bessent, saying he fully agrees with his U.S. counterpart that "a good deal is more important than a rushed deal". He also remained sort of optimistic on a trade deal. A mutually beneficial trade agreement between Japan and U.S. remains possible, Akazawa wrote in the post.

Japanese Prime Minister Shigeru   Ishiba   said Japan ’ s auto exports   to U.S.   will   face a 15%   tariff rate, down   from   the current 25%   levied across countries, according to Reuters. In addition to the 10% worldwide baseline tariffs, Japan now also faces a 25% U.S.-imposed tariff on automobiles and auto parts, and a 50% tariff on steel and aluminum. Auto exports   accounted   for 28.3%   of all shipments in   2024,   according to   Japanese   customs   data.

Japanese automakers ’   shares surged   following the trade deal announcement. Shares   of Mazda Motor   gained as   much as nearly 18% on Wednesday. Both Toyota   and Mitsubishi Motors   stocks   jumped more than 10% at midday, while Honda   and Nissan stocks each   rose over   8%.

The 15% tariff rate is   not   just lower than   the 24%   tariffs the Trump administration   originally implemented   in   early April,   but   also lower than the 25%   tariffs that   Trump   threatened the   U.S. would charge on all of imports from Japan starting on August 1. During his letter to Ishiba released   on July 7,   the new tariffs will separate   from all existing sectoral tariffs, and goods transshipped to evade a higher tariff will be subject to that higher tariff.  

Trump on July 7   also signed   an executive order, delaying   the   tariff deadline on July 9   to August   1.   The executive order effectively extended the July 9 deadline   by more than three weeks.

Ishiba on July   8   called the new 25% tariffs   "extremely regrettable" but said he was determined to continue negotiating.   Tokyo will continue to seek a pact with the   U.S.   "that benefits both countries, while protecting Japan's national interests" Ishiba told a cabinet meeting in televised remarks.   Ishiba said Trump ’ s tariff rate is lower than the levels he had threatened earlier and opens the way for further negotiations.

It was reported at the start of this month that the Japanese officials insisted they are not going to accept the 25% auto tariffs remain in place under the possible trade deal. Despite prior ministerial-level rounds of negotiations until early July, little progress had been made in Japan's attempt to seek tax exemption.

Ishiba on July 3 pledged to defend national interest in the face of Trump ’ s threat of higher tariffs.   But   the trade deal became more helpful   for the prime minister   after   the   governing coalition lost its majority in Japan ’ s upper house   elections   on   the weekend.   For   Ishiba, "a favourable U.S. trade deal could help stave off a no-confidence motion or internal challenge from the LDP [ Liberal Democratic Party ] ,"   HSBC said in a note on Monday.