Trump Signs Japan Trade Agreement With 15% Tariffs as Ishiba Is Touted by Party

U.S. President Donald Trump signed an executive order on Thursday sealing a new trade agreement with Japan, imposing a 15% base tariff on the majority of Japanese imports, including cars. The action comes after months of talks and is accompanied by major commitments from the Japanese government.

Part of the deal is that Japan will invest $550 billion in projects chosen by the U.S. and boost American good purchases like corn, soybeans, commercial aircraft, and defense hardware. The pact also includes more imports of U.S. rice and $8 billion of agriculture products.

The executive order indicates that the tariffs will be retroactive to items brought in from August 7, 2025. Industry-specific levies will be imposed on automobiles, aerospace products, medicine, and natural resources. Relief on car tariffs will commence within a period of seven days.

The deal arrives amidst threats by big automakers. Toyota had earlier forecast a $10 billion impact to its sales in the United States from tariffs, compelling it to trim its annual profit outlook by 16%. Ford and GM have also estimated multi-billion-dollar losses from the broader tariff war.

Japan's lead negotiator, Ryosei Akazawa, presented a letter signed by Prime Minister Shigeru Ishiba inviting Trump to Japan. The timing is sensitive from the viewpoint of politics since Ishiba is coming under increasing pressure within his governing Liberal Democratic Party.

A recent party document attributed loss in July's upper house election to inadequate youth support, scandals, and dismal economic messaging. A number of senior members are said to have called for Ishiba to resign. Eurasia Group analysts said Ishiba only has a narrow hope of riding out a leadership challenge this week, estimating as much as 60% chances of defeat.