Link Securities | US President Donald Trump announced yesterday a trade agreement with Japan that will result in the imposition of 15% trade tariffs on Japanese imports, instead of the 25% tariffs announced in the initial letter. Government officials from both countries confirmed that this tariff reduction will also apply to automobiles. Trump said Japan agreed to open its agricultural and automotive markets to US companies.
Bloomberg quoted a senior Trump administration official who clarified that Japan agreed to boost its rice imports by 75% and purchase $8 billion worth of agricultural products, among other products. For his part, Japanese trade negotiator Akazawa clarified that Japan will not reduce its trade tariffs on agricultural products or its 770 billion tariff-exempt quota, but that the ratio of rice in that quota will be increased.
In addition, Japan will increase its annual defence spending with US companies to $17 billion, from the current $14 billion, purchase 100 Boeing aircraft and accept the production of American vehicles with US safety standards. Trump added that Japan will invest $550 billion in the US.
