View PDF After more than three months of formal negotiations and many more months of speculation about the Trump administration’s trade and economic policy toward Japan, Washington and Tokyo have agreed to a trade deal.

President Donald Trump says the US has agreed to a "massive" trade deal with Japan, one of the country's largest trading partners. Japan has agreed to invest $550bn (£407bn) in the US while its goods sold to America would be taxed at 15% when they reach the country - below the 25% tariff Trump had threatened.

Analysts at Bank of America said that the Japan deal "looks like a reasonable blueprint" for other auto-exporting countries like South Korea.

Japan's chief tariff negotiator Ryosei Akazawa speaks to the media after a meeting between Prime Minister Shigeru Ishiba and Treasury Secretary Scott Bessent in Tokyo, on July 18, 2025. Shuji Kajiyama/AP

The White House factsheet on the trade deal mentions that Japan will also buy 100 Boeing Co. planes as well as US defense equipment worth additional billions of dollars annually. Akazawa said both these pledges were based on existing plans by Japanese airlines and the government, respectively.

Japanese automakers express mixed feelings on the new Trump trade deal. While welcoming lower tariffs, concerns linger over market access and the deal's long-term impact.

Japan's $550 billion investment package agreed in this week's U.S. tariff deal could help finance a Taiwanese firm building semiconductor plants in the U.S., Japan's top trade negotiator Ryosei Akazawa said on Saturday.

America is now poised to dominate liquified natural gas (LNG) exports to Japan, which is the world’s second-largest purchaser of LNG. Since the US sits on one of the world’s largest natural-gas deposits, this is a win-win for both nations.

Japan's chief negotiator reached an agreement with U.S. Commerce Secretary Howard Lutnick in mid-June on a deal offering massive Japa