Japan and the United States are nearing completion of a deal to reduce tariffs on Japanese car imports, with the rate expected to drop from 27.5% to 15% within 10 to 14 days following the issuance of a U.S. presidential executive order, according to a Japanese government source cited by Reuters on Thursday.
As reported by CBT News, the implementation of the executive order is still under negotiation, and the final decision lies with President Donald Trump.
The order will outline the tariff revisions, ensuring that Japanese imports formerly facing higher duties will not be taxed twice, while those previously taxed below 15% will be brought in line with the new standard. It will also reference Japan’s planned $550 billion investment package for the U.S., which includes equity investments, loans, and guarantees from state-owned Japanese banks.
Additionally, the executive order will address Japan’s commitments to increase U.S. rice imports and buy more U.S.-manufactured aircraft, the source said. A joint statement detailing the agreement and a memorandum detailing the investment package rules are also expected to be released with the executive order.
Japan’s lead trade negotiator, Ryosei Akazawa, indicated that the agreement has entered its final negotiation phase. “Both Japan and the U.S. have agreed to implement the agreement reached in July faithfully and swiftly,” he said.
The tariff agreement expands on a July deal where the United States agreed to reduce tariffs on Japanese cars. The move is part of a wider initiative to deepen economic and trade ties between the U.S. and Japan while offering greater clarity for Japanese automakers facing tariff-related challenges in the American market.
The anticipated tariff cut is likely to benefit the automotive sector significantly, reducing production costs for Japanese manufacturers and potentially shaping pricing strategies for U.S. buyers in the near future.
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