The new U.S.-Japan trade deal lowers tariffs and strengthens economic ties, helping challenge China's regional aggression and instability.

President Donald Trump announced a trade agreement with Japan on Tuesday, making it the largest U.S. trade partner to broker an accord as the White House threatens to impose tariffs on dozens of countries within days.

View PDF After more than three months of formal negotiations and many more months of speculation about the Trump administration’s trade and economic policy toward Japan, Washington and Tokyo have agreed to a trade deal.

Analysts at Bank of America said that the Japan deal "looks like a reasonable blueprint" for other auto-exporting countries like South Korea.

EDINBURGH, Scotland (AP) — The United States and the European Union agreed on Sunday to a trade framework setting a 15% tariff on most goods, staving off — at least for now — far higher import duties on both sides that might have sent shock waves through economies around the globe.

Japan's government said on Friday that profits from a $550 billion investment package agreed in this week's tariff deal with the U.S. would be split between Japan and the U.S. according to the degree of contributions by each side.

After months of fraught negotiations with the United States, Japan clinched a deal just days before punitive tariffs were scheduled to take effect.

The deal imposes 15% tariffs on Japanese cars and other goods, one of the more favorable rates. While the start date and other basic elements are still unknown, Treasury Secretary Scott Bessent warned this week that the US would monitor implementation and bump the rate up to 25% if Trump isn’t satisfied.

Japan is playing down the risks from its deal after the White House said the U.S. would direct $550 billion in investments by Japan and keep 90% of the profit.