US President Donald Trump has formalised the trade agreement with Japan by signing an executive order on Thursday (Friday AEST). The agreement stipulates that America will impose a maximum 15 per cent tariff on most of its products, including automobiles and parts. This order finalises the deal initially reached in July, following negotiations between Washington and Tokyo regarding the specific terms.
The directive is designed to prevent the accumulation of President Trump’s country-specific duties on top of existing levies. The 15 per cent tariff will be applied retroactively to the majority of products shipped beginning August 7, coinciding with the date when the US president’s tariffs on numerous trading partners came into effect. Relief measures specifically targeted at aerospace and automobile imports are slated to take effect within seven days from Thursday.
Japan had advocated for the US to honour its commitment to reduce auto tariffs from 27.5 per cent, a move intended to provide relief to Japan’s vital automotive industry. As part of this bilateral agreement, the United States will eliminate certain tariffs imposed on aircraft and aircraft parts, as well as generic pharmaceuticals, ingredients, and precursor chemicals. The precise details and implications of these tariff adjustments are expected to be closely monitored by businesses and trade organisations in both countries.
