According to Bloomberg, the Trump Government indicated that, under a trade agreement between the United States and Japan, the United States would formally impose a 15 per cent lower tariff rate on cars and car parts imported from Japan, starting on Tuesday morning, United States Eastern Time.
The U.S. Customs and Border Protection guidance document on the implementation of the agreement states that the lower rate would apply to “Japanese-produced passenger vehicles, light trucks (cars) and car Zeros for consumption at 12.01 a.m. or later in the summer of 16 September 2025 at the United States.
Earlier this month, United States President Trump signed an executive order to implement the agreement, imposing a maximum of 15 per cent tariff on most Japanese products, including cars. Previously, Tokyo had urged the United States Government to comply with the agreement to lower the vehicle tariff from 27.5 per cent, which was considered essential for the car industry, which was the main driving force of the Japanese economy.
The automobile industry is the largest component of exports to the United States and the backbone of employment and the driver of wage growth.
The overall trade agreement also included Japan ‘ s commitment to establish a US investment fund of US$ 550 billion, a key concession that would help to ensure lower tax rates. However, the source of funding for the investment fund has been questioned and the two countries have described this commitment differently. Howard Lutnik, United States Secretary of Commerce, has warned that Japan will face higher import tariffs if the investment decisions of Trump are not funded.