The US has agreed to lower tariffs on Japanese car imports to a final rate of 15%, following successful negotiations between representatives of their respective governments. The deal appears to have put an end to months of uncertainty for the Japan auto industry, after US president Donald Trump announced earlier this year that he would hike duties on all new vehicles entering the country to 25%, ahead of bilateral negotiations with its key trading partners.

Embattled Japanese Prime Minister, Shigeru Ishiba, who rejected calls for his resignation from inside and outside his party after his recent defeat in the House of Councillors elections, said his government “negotiated arduously with national interests at stake on various items including automobiles.” He pointed out that “while the deal protects Japan’s national interests, it will also help create employment in both Japan and the US.”

Donald Trump described the outcome of the negotiations as "the largest trade deal in history," with Japanese companies agreeing to invest up to US$ 550 billion in the US to help support the country’s manufacturing industry.

News of the deal sent share prices on the Tokyo Stock Exchange soaring, with Toyota’s share price jumping by 15% in a single day, while Honda’s share price soared by 12% and Nissan was up by 11%. Japanese automakers exported almost 1.5 million vehicles to the US last year, worth some US$ 41 billion.

US automakers, however, said the deal with Japan would put them at a significant disadvantage, given that they face much higher tariffs on imports of components and raw materials such as steel and aluminium. Matt Blunt, president of the American Automotive Policy Council which represents General Motors, Ford and Stellantis, said in a statement: We need to review all the details of the agreement, but this is a deal that will charge lower tariffs on Japanese autos with no US content.”

"US agrees to cut Japanese vehicle import tariffs to 15%" was originally created and published by Just Auto, a GlobalData owned brand.

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