Topline
The Trump administration has agreed to revise a presidential order on tariffs against Japan to correct an “extremely regrettable” error and eliminate the stacking of multiple tariffs on Japanese goods, Japan’s top trade negotiator said, ending confusion caused by varied interpretations on both sides of the trade deal between Japan and the U.S.
U.S. Treasury Secretary Scott Bessent and Japan’s Minister in charge of Economic Revitalization Ryosei Akazawa.
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Key Facts
After a meeting with U.S. officials, Japan’s top trade negotiator told reporters at the Japanese embassy in Washington that the reciprocal tariff of 15% on Japanese imports will not stack on top of previously announced levies.
This is similar to the arrangement that the U.S. agreed with the European Union, as outlined in President Donald Trump’s July 31 executive order, but no such carve-out was mentioned for Japan.
The correction means that for items like fabrics, which faced an earlier tariff rate of 7.5%, the levy will rise to 15% instead of stacking up to 22.5% (15+7.5).
For other Japanese goods which already faced a tariff rate above 15%—like beef at 26.4%—the levy will remain the same and not see an additional 15% stacked on top.
Akazawa said the U.S. has also agreed to refund any excess tariff collected due to the “extremely regrettable” error in the administrative process.
What About Auto Tariffs?
The trade officials also said the White House will issue a new presidential order outlining a previously agreed-upon deal to lower tariffs on Japanese autos and auto parts to 15% from 27.5%. Trump had agreed to reduce the tariffs he previously imposed on Japanese cars in exchange for a $550 billion investment commitment from Japan.
How Have The Markets Reacted?
Japan’s benchmark Nikkei 225 index rose 1.85% to 41,820.48 points on Friday. Top Japanese automakers saw even bigger jumps as Toyota’s shares surged 3.47% to $18.77 (JPY 2,773). Honda and Subaru shares rose 3.95% and 5.37% respectively.
Further Reading
Japan says U.S. to fix Trump tariff order, refund overpayments (Kyodo News)
Japan Says Trump to Correct ‘Extremely Regrettable’ Error in Tariff Order (New York Times)