Trump Declares “Massive Deal” with Japan, Citing $550 Billion Investment in US

President Announces Breakthrough Trade Agreement Including Reciprocal Tariffs and Market Access Amidst Intensifying Negotiations

---

Washington [US], July 23: US President Donald Trump announced on Tuesday night (local time) that the United States and Japan have finalized what he called a “massive deal,” potentially “the largest deal ever made,” following extensive and drawn-out negotiations between the two powerful nations.

Taking to Truth Social, Trump posted, “We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it.”

Shortly after his online announcement, CNN reported that Trump addressed a reception for Republican members of Congress in the White House’s East Room. There, he declared, “I just signed the largest trade deal in history; I think maybe the largest deal in history with Japan. They had their top people here, and we worked on it long and hard. And it’s a great deal for everybody.”

According to CNN, the agreement includes a 15% “reciprocal” tariff on Japanese goods entering the U.S. President Trump emphasized that the U.S. “will receive 90% of the profits” from this investment.

This agreement marks a significant breakthrough after months of stalled negotiations with key trading partners, especially as Trump’s August 1 deadline for potentially higher tariffs loomed. The Japan deal was one of three major trade developments announced by Trump on that day.

Trump further stated that Japan would open its market to U.S. trade, specifically mentioning automobiles and agricultural products. “Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%.”

Calling it a crucial moment for bilateral relations, Trump added, “This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan. Thank you for your attention to this matter!”

Key Sticking Points in Negotiations:

Trade in rice had been a major point of contention during the talks. “They won’t take our RICE, and yet they have a massive rice shortage,” Trump had previously posted on Truth Social last month. CNN reported that Japan purchased $298 million worth of U.S. rice last year and $114 million between January and April of this year. A 2021 report by the Office of the United States Trade Representative under former President Joe Biden had noted, “Japan’s highly regulated and non-transparent system of importation and distribution for rice limits the ability of US exporters to have meaningful access to Japan’s consumers.”

Automobiles, a cornerstone of Japan’s economy, were also central to the discussions. “We didn’t give them one car in 10 years,” Trump claimed earlier this month. However, CNN cited data from the Japan Automobile Importers Association showing that Japan imported 16,707 American-made vehicles last year.

Optimism from US Treasury Secretary:

Just last week, U.S. Treasury Secretary Scott Bessent met with Japanese Prime Minister Shigeru Ishiba in Tokyo, expressing optimism about achieving a breakthrough. In a post on X, Bessent stated, “A good deal is more important than a rushed deal, and a mutually beneficial trade agreement between the United States and Japan remains within the realm of possibility.”

Expert Analysis on the Deal:

Mary Lovely, a trade expert at the Peterson Institute, told CNN that the agreement would relieve Japan from previous tariff pressures. “The ‘deal’ relieves Japan of the 25% tariff threat and puts it potentially in a competitive position vis a vis similar US suppliers,” she explained. Lovely also suggested, “The US is unlikely to sell many cars and trucks… from the US. Agricultural liberalization (is) a win for Japanese consumers, assuming they are willing to try excellent California rice.”

CNN highlighted that Japan is one of the U.S.’s most significant trading partners and its fifth-largest source of imports. Last year, Japan exported $148 billion worth of goods to the U.S., including cars, car parts, and agricultural and construction machinery. Japanese goods had faced a 24% reciprocal tariff before Trump initiated a 90-day pause in April, after which they were subject to a minimum 10% tariff. Earlier this month, CNN reported that Trump had warned Prime Minister Ishiba in a letter that he could impose a 30% tariff starting August 1.

In return, the U.S. exported $80 billion worth of goods to Japan last year, including oil and gas, pharmaceuticals, and aerospace products.

While Japan is a close U.S. ally, its top trading partner remains China. CNN reported that the Trump administration has consistently urged its allies to reduce trade with China as a condition for securing trade deals with Washington.

This new agreement builds upon a 2019 expanded trade pact between the two countries, which went into effect the following year, allowing more goods to be shipped duty-free. It’s also worth noting that Japan holds $1.1 trillion in U.S. Treasury securities, making it the largest foreign creditor to the United States.