The US President Donald Trump has signed an executive order to lower tariffs on Japanese automobile imports, among other products.
The order, which comes after extensive negotiations, will see tariffs on Japanese autos reduced to 15% from the current rate of 27.5%.
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This reduction is scheduled to take effect one week after the order is officially published, reported Reuters.
This move is expected to alleviate some of the uncertainty that has been affecting Japan’s substantial automotive industry.
Additionally, the order stipulates that the 15% tariff on Japanese imports, as agreed upon in July, will not be added to products that already have higher tariffs.
For items previously subjected to tariffs below 15%, the rate will be adjusted to the 15% threshold.
Japan’s chief trade negotiator, Ryosei Akazawa, expressed his relief on the social media platform X, referencing the prolonged trade discussions that had been a source of frustration in Tokyo.
Akazawa told reporters in Washington that Japan welcomes the executive order as it represents “a steady implementation of the agreement reached on July 22.”
Japanese car manufacturers, such as Toyota, which anticipated a JPY1,400bn ($9.5bn) impact on profit due to the tariffs, have commended Trump’s efforts in securing a trade deal with Japan.
South Korea is awaiting a similar executive order that would confirm a trade agreement with the US, including a reduction of tariffs on US imports from South Korean automakers from 25% to 15%.
A South Korean trade official indicated that the country is evaluating the potential ramifications of the executive order concerning Japan.
Last month, Trump reportedly said that Japan would begin importing Ford’s F-150 pickup trucks, signalling a potential misunderstanding between the two nations regarding the specifics of July’s trade agreement.
The Japan Automobile Manufacturers Association reported that Japan’s new vehicle market experienced an 8% year-on-year decrease in August, with 301,221 units sold compared to 328,471 units in the same month of the previous year.
