Description: Japan and the US have agreed on concluding their trade agreement with Trump setting tariffs at 15% on all Japanese imports reduced from the previous 25% with Japan also agreeing to invest additional $550 billion on the US markets. The trade agreement caused markets concerning the automotive industries, agriculture and food markets to surge in Asia as the news was positively received by both investors and manufacturers. Japan has struggled to secure favorable trade conditions with the US, as the negotiations were repeatedly reported as problematic, however, the country solidified its status as one of the largest US trading partners by securing bilaterally favorable conditions with the US. Prime Minister Shigeru Ishiba after concluding the US trade deal, hosted EU Commission President, Ursula von der Leyen and European Council President Antonia Costa, as they also discussed trade ties and strengthening of various domains of their billateral partnership.
Impact: The US – Japan trade deal, although somewhat skeptically received by US automotive manufacturers, represents significant reconciliation in bilateral relations between the two countries, opening significant possibilities for the expansion of their strategic partnership. The trade deal is expected to facilitate close ties between the US and Japanese car industry sectors, and ease access for US products and companies on the Japanese market. The deal arrives relatively late for Prime Minister Ishiba who is facing domestic political pressure to resign following his party’s loss in the Upper House parliamentary vote, however, it might improve his political standing, depending on the reaction from Japan’s leading industries and the political opposition. Trump continued to prioritize trade deals with Asian countries, effectively pressuring the EU and China by setting the benchmark tariff rates for some of the US larger economic and strategic partners.