Trump signs order cutting tariffs on Japanese cars to 15%

U.S. President Donald Trump signed an executive order on Thursday that reduces tariffs on Japanese car imports from 27.5% to 15%, formalising a trade agreement between Washington and Tokyo announced in July.

The order applies a 15% levy to almost all Japanese exports to the United States, including vehicles and pharmaceuticals, the White House said. The move is intended to ease uncertainty for major automakers such as Toyota, Honda and Nissan and to codify terms reached after months of negotiations.

Under the agreement, Japan has committed to make substantial investments in the United States and to open parts of its economy to American products. The White House said Tokyo will invest $550 billion in U.S. projects and gradually permit greater access for U.S. goods, including cars and rice. Japan also agreed to purchase $8 billion worth of U.S. goods a year, the administration said, naming agricultural products, fertilisers and bioethanol among the items.

The deal follows a period of heightened trade tensions earlier this year, after President Trump announced sweeping tariffs on many trading partners in April. Negotiations between the two governments continued through the summer and produced the framework announced in July, which the executive order now puts into force.

Japan’s top trade negotiator, Ryosei Akazawa, reacted to the White House announcement by reposting it and writing "Finally" in Japanese. The administration framed the pact as a means to help reduce the U.S. trade deficit with Japan and to provide U.S. businesses with what it described as "breakthrough openings."

The tariff reduction affects automakers directly by lowering the duty on imported cars from Japan, a shift that industry executives had said was necessary to provide clarity for production and pricing decisions. The order covers a broader slate of exports as well, including pharmaceutical products, which face the same 15% levy under the agreement.

White House officials and Japanese negotiators have said the accord combines tariff adjustments with commitments on investment and market access, rather than relying solely on unilateral duties. The administration characterised the package as reciprocal: lower tariffs on Japanese goods in exchange for increased Japanese purchases of U.S. products and large-scale capital investment.

Trade analysts note that the precise effects of the agreement will depend on implementation details and on how swiftly Japanese investment and purchase commitments are realised. The executive order places the terms into U.S. law by presidential action, but companies and trade partners will watch for subsequent regulatory guidance and any follow-up measures from both governments.

The July announcement and Thursday’s executive order mark a significant step in U.S.-Japan economic relations after months of negotiation. Both governments have presented the outcome as a resolution to recent trade frictions, coupling tariff changes with pledges intended to bolster bilateral commercial ties.