On September 4, 2025, President Trump finalized the United States–Japan Strategic Trade and Investment Agreement, imposing a 15% tariff on most Japanese imports while reducing tariffs on Japanese autos and U.S. exports like aircraft and pharmaceuticals.
The deal, addressing a $70 billion U.S. trade deficit, promotes reciprocity with Japan committing to $550 billion in U.S. investments. Effective by late September, it strengthens U.S.-Japan ties, a key alliance amid U.S.-China rivalry, though tensions linger over defense spending and auto market access. Trump’s intentions include reducing trade deficits, boosting domestic manufacturing, and countering China geopolitically through bilateral deals. While enhancing economic ties, the tariffs may raise U.S. consumer costs. Japan benefits from avoiding higher tariffs, but global trade fragmentation could challenge both economies. The agreement reflects Trump’s “America First” policy, potentially shaping future deals with allies like the EU.
