Washington, D.C. — President Donald Trump formalized a high-stakes trade agreement with Japanese Prime Minister Sanae Takaichi on Tuesday, marking a key moment in his nearly weeklong tour of Asia aimed at strengthening ties with major trading partners.
The deal, hammered out over the summer, sets U.S. tariffs on Japanese goods at 15%, down from the 25% initially threatened by Trump. In return, Japan pledged to invest $550 billion in U.S. industry and open its market to American rice, cars, and defense equipment. Specific investment destinations have yet to be disclosed.
A major highlight of the agreement is a framework for cooperation on critical minerals and rare earth metals. These resources are essential for computer chips, aerospace, and advanced technology, and Trump has pursued similar deals with Australia and Ukraine as China restricts exports.
At a brief press moment before the signing ceremony, Trump called the deal “very fair” and promised it would usher in “tremendous trade together, more than ever before.” He praised Japan as “an ally at the strongest level,” reinforcing the long-standing partnership between the two nations.
Japan is the U.S.’s fifth-largest trading partner, purchasing $79.7 billion in American goods last year while exporting $148.2 billion to the United States. Cars and auto parts made up more than a third of U.S. imports from Japan, underlining the country’s massive automotive industry.
The leaders also touched on defense cooperation, with Trump thanking Japan for its recent U.S. weapons orders. Takaichi, Japan’s first female prime minister, called the U.S.-Japan alliance “the greatest in the world” and emphasized her commitment to a “free and open Indo-Pacific.”
This meeting was their first face-to-face encounter, with Takaichi taking office only last week. She previously worked closely with the late Prime Minister Shinzo Abe, a longtime friend of Trump until Abe’s assassination in 2022.
With this agreement, both countries signal not just economic cooperation but a shared strategic stance against growing regional challenges, particularly from China, positioning the U.S. and Japan as closer partners than ever.