President Trump signed an Executive Order on September 4, 2025, implementing a sweeping new trade agreement with Japan. At the core of the agreement is a 15% baseline tariff on nearly all Japanese imports, including cars and auto parts, unless existing duties already meet that level.
CBP’s guidance clarifies that these tariffs are applied retroactively to goods entered or removed from warehouse on or after 12:01 a.m. EDT on August 7, 2025.
In exchange, Japan has committed to invest $550 billion in US industries ranging from semiconductors and shipbuilding to energy, AI, and pharmaceuticals. The White House projects this will create hundreds of thousands of American jobs while reinforcing supply chain security.
The pact also boosts US exports to Japan. Tokyo pledged to purchase an additional $8 billion a year in agriculture, including rice, soybeans, and sustainable fuels, along with $7 billion annually in US energy—with liquefied natural gas as a centerpiece. Barriers to US auto exports will also be eased as Japan recognizes American safety standards.
Many see this agreement as one of the most ambitious trade deals in decades. By combining new tariff rules with historic Japanese investment, it’s designed to narrow the US trade deficit, strengthen key industries, and set the stage for future trade partnerships.
Mohawk Global Trade Advisors is closely monitoring these changes and what they mean for importers. Our team can help you navigate the risks, adjust sourcing strategies, and stay compliant. Connect with us today to discuss how this agreement may impact your business.