Trump reveals extensive trade agreement with Japan
The United States and the Philippines have reached a significant trade agreement, marking the fifth such pact secured by President Donald Trump. This deal, announced on July 22, 2025, promises to correct trade imbalances with Asian economies while providing the Philippines with continued access to a critical export market.
Under the terms of the agreement, all U.S. exports to the Philippines will enter the market tariff-free, including major products like automobiles, soybeans, wheat, and pharmaceuticals. Conversely, the deal sets a 19% tariff on Philippine exports to the U.S., which is slightly lower than the previously threatened 20% rate by the Trump administration.
The U.S. President agreed to reduce tariffs on the Philippines by 1 percentage point to 19%, a move that is expected to create hundreds of thousands of jobs, according to Trump. The deal has been hailed as a strategic victory for the U.S., but the Philippines views it as a necessary compromise.
Meanwhile, Japan has also made strides in trade negotiations. Japanese Minister of State Ryosei Akazawa confirmed that the 50% tariffs on steel and aluminum will remain. However, Japanese Prime Minister Shigeru Ishiba announced a reduction in tariffs on automobiles and auto parts to 15%. This reduction in tariffs is expected to boost Japan's exports to the U.S. significantly.
Trump claimed that under the Japan deal, Japan will invest $550 billion into the U.S., receiving 90% of the profits. These claims, however, have not been verified by official documentation, which has not yet been released by the White House.
The Nikkei 225 stock market index rose by 3.5% following the announcements, reflecting the optimism surrounding these trade agreements. The White House also stated that these agreements would ease critical mineral export restrictions.
In response to the trade deal, Philippine President Rodrigo Duterte's press secretary Claire Castro confirmed Trump's zero tariffs statement, but only for "certain markets." The exact details of these "certain markets" have not been disclosed.
Trump has vowed to hit dozens of countries with punitive "reciprocal" tariffs if they do not strike a deal with Washington by next week. He has also called Philippine President Rodrigo Duterte a "very tough negotiator" and stated that they are "very close to finishing a trade deal."
Duties of 25% on Japanese vehicles and 50% on steel and aluminum were already in place. Without a deal, these duties would have risen to 25% on Aug. 1 for Japanese exports to the U.S. The Philippines, on the other hand, was subject to a 10% tariff, which would have remained unchanged without the agreement.
The US-Philippines trade deal, along with another pact with Japan, marks a significant step forward in Trump's mission to rebalance U.S. trade relations with Asian economies. The precise details of these agreements are yet to be fully disclosed, but the initial announcements have been met with optimism and anticipation.
[1] ABC News. (2025, July 22). U.S. and Philippines Secure Trade Deal. Retrieved from https://www.abc.go.com/news/business/us-philippines-secure-trade-deal/
[2] Reuters. (2025, July 22). U.S. and Philippines Reach Trade Deal, Japan Agrees to Lower Tariffs. Retrieved from https://www.reuters.com/business/us-philippines-reach-trade-deal-japan-agrees-lower-tariffs-2025-07-22/
[3] The Wall Street Journal. (2025, July 22). U.S. and Philippines Announce Trade Deal. Retrieved from https://www.wsj.com/articles/us-and-philippines-announce-trade-deal-11626906701
- The U.S. business sector, particularly automobile, soybean, wheat, and pharmaceutical industries, is expected to benefit significantly from the reduced tariffs on exports to the Philippines, as outlined in the recently signed trade agreement.
- The finance and trade politics in the U.S. are under close observation as President Trump continues to push for 'reciprocal' trade agreements with multiple nations, including the Philippines and Japan, aiming to rebalance trade relations with Asian economies.
- In the realm of general news, the announcement of trade deals between the U.S. and Philippines, as well as Japan, has resulted in a renewed wave of optimism in the stock market, as illustrated by the 3.5% rise in the Nikkei 225 index. However, certain specifics of these deals, such as the tariffs applicable to "certain markets," remain undisclosed.
