key takeaways
- The US and Japan secured a trade deal that will allow Japan to avoid 25% “reciprocal” tariffs on 1 August and, most importantly, the Trump administration’s 25% automotive tariffs.
- The agreement will not save Prime Minister Ishiba Shigeru’s job but it clears an important obstacle for his successor, though there are some questions about specific provisions of the agreement and other sources of bilateral friction remain.
- Meanwhile, the announcement of a EU-Japan Competitiveness Alliance the same day as the US-Japan deal suggests that Tokyo will begin looking to like-minded countries to support a rules-based trading system.
Japan Foresight 