Washington, D.C. – A new trade agreement between the United States and Japan went into effect this week, significantly lowering tariffs on Japanese automobiles and other key products.President Donald Trump signed a decree Thursday reducing the tariff on Japanese car imports from 2.5% to 15%, as reported by Reuters. Tariffs on airplane parts will be eliminated entirely, while those on semiconductors and pharmaceuticals will be set to the lowest possible levels-no higher than those extended to any other U.S. trade partner.
The agreement, finalized after months of negotiations with Japan – America’s most important Asian federation - also includes a commitment from Japan to invest $550 billion in the United States. Japan has further pledged to increase purchases of U.S.agricultural products and open its market to american defense equipment.
The new regulations become effective seven days after official publication.Analysts predict the reduced tariffs could increase the competitiveness of Japanese automakers in the U.S.market, potentially impacting European car exports.