In return, Japan will invest nearly €469 billion and the United States will retain “90 percent of the profits.”
US President Donald Trump announced late Tuesday “a huge agreement with Japan,” which will involve an investment of $550 billion (almost €469 billion) and a 15 percent tariff, a ten-point reduction from the 25 percent tariff announced two weeks earlier on all Japanese imports.
“We just closed a huge deal with Japan, perhaps the largest agreement ever reached. Japan will invest, under my leadership, $550 billion (almost €469 billion) in the United States, which will receive 90 percent of the benefits,” the president stated in a post on his social media platform, Truth Social, in which he assured that the two countries will continue to “maintain an excellent relationship.”
The White House resident emphasized that the pact will lead to the creation of “hundreds of thousands of jobs” in the United States, although he specified that “perhaps most importantly, Japan will open its country to trade, including cars and trucks, rice and other agricultural products, among other things. Japan will pay reciprocal tariffs of 15 percent to the United States.”
Moments later, Trump told reporters that “the tariffs are working better than anyone, except me and a few people in this room, thought they would,” pointing to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, thanking them for being “incredible allies.”
Hours earlier, the International Monetary Fund (IMF) warned the US president that increasing trade tariffs has only a minimal impact on addressing the situation in deficit-ridden economies like his own, recommending a fiscal consolidation plan to reduce the debt-to-GDP ratio.
“China’s rising trade surpluses and the growing US trade deficit reflect domestic macroeconomic imbalances in each country,” states the IMF’s annual report on the external sector, which insists that appropriate solutions must be based on domestic macroeconomic policies.
The agreement comes at a delicate time for the Japanese government, following the clear defeat of the Liberal Democratic Party (LDP) and Komeito coalition parties in the Senate by-elections held on Sunday.
Japanese Prime Minister Shigeru Ishiba reiterated his intention on Monday to continue governing in a minority, among other reasons, to “talk directly with President Trump about the tariffs” and to seek “an agreement that is beneficial to both Japan and the United States with the concept of ‘investment, not tariffs.'”
