Goods coming to US from Japan will be tariffed at 15 percent, but Canadian and Mexican goods still face 35 and 30 percent levies

Japan and the US have negotiated a trade deal that cuts tariffs from 25 to 15 percent.

Detroit is furious because tariffs on its Mexico and Canada-built cars are much higher.

Trump has threatened 30 percent tariffs on Mexico, 35 percent on Canada from Aug 1.

Japan and its automakers are celebrating a freshly inked trade deal between the country and US that dramatically reduces the tariffs on its exports to America. But that same deal has left Detroit’s automakers apoplectic with rage because their own vehicles could now be subject to higher tariffs than those shipped in from Asia.

Related: Stellantis Shipments To North America Fell Off A Cliff In Q2

This week’s agreement means goods coming to the US from Japan will be tariffed at 15 percent, down from the current 25 percent level. Stock in Japanese automakers leapt at the news, Toyota’s climbing 15 percent and Mazda’s surging 17 percent.

Lower Tariffs, Rising Tensions

But under those terms cars imported to the US from Japan would attract a lower duty than those from Canada and Mexico, where Detroit-based brands build some of their vehicles. President Trump has threatened to push tariffs on goods coming from Mexico to 30 percent and those from Canada to 35 percent starting August 1.

The White House called the Japan deal “a historic win for American automakers by putting an end to Japan’s unfair auto trade barriers for American-made cars,” insinuating that the agreement was good for Detroit because it would now be able to sell more vehicles in Japan.

Toyota

However, far more cars are sent from Japan to the US than flow the other way – auto exports made up more than 28 percent of all shipments to America in 2024, according to customs data reported by CNBC.

Detroit’s car industry was rather less enthusiastic than The White House, telling Reuters, “any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American-built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers.”

Mounting Costs and Global Unease

GM says tariffs have already cost it $1.1 billion in the second quarter of 2025 and could cost it $5 billion by the end of 2025. The US-Japan agreement rubs salt in a wound that’s already sore after the UK negotiated a 10 percent tariff on its goods.

Meanwhile, European carmaker are also anxious to strike a deal, but discussions between the EU and the US haven’t proved fruitful and Trump recently threatened a 30 percent tariff on goods from the bloc.

President Trump and European Commission President Ursula von der Leyen announced Sunday that the US and EU had agreed to the framework of a trade deal that included a baseline tariff rate of 15% on EU goods imported into the US.

Trump, , speaking after negotiations in Scotland on Sunday, called the deal “the biggest of them all,” while von der Leyen said that “15% is not to be underestimated, but it is the best we could get.” Other details of the framework are still being confirmed.

Meanwhile, the South China Morning Post, a Hong Kong-based English-language newspaper, reported that “Beijing and Washington are expected to extend their tariff truce by another three months at trade talks in Stockholm beginning on Monday.”

On Friday, Trump said that letters dictating tariff rates for over 200 countries would go out soon while his administration works to clinch deals with larger trade partners. Trump said the US hasn’t had a “lot of luck” with Canada and suggested he may impose threatened 35% levies on goods not covered by the US-Canada-Mexico trade agreement.

Last week, President Trump touted a deal with Japan that included a $550 billion investment in the US and a 15% tariff on goods imported into the US from Japan. On Saturday, Japanese trade negotiator Ryosei Akazawa suggested the money could be used to help finance an unnamed Taiwanese chipmaker building plants in the US.

“For example, if a Taiwanese chipmaker builds a plant in the US and uses Japanese components or tailors its products to meet Japanese needs, that’s fine too,” he said.

In March, Taiwan’s TSMC announced a $100 billion investment in the US, on top of plans to build three plants in Arizona, one of which is already operating.

In any case, the Japan trade deal may have set a precedent for Trump’s new baseline tariff rate. Trump said tariffs would range from 15% to 50%, with tougher partners facing higher rates. That’s a step up from the 10% baseline duties currently in effect..

Read more: What Trump’s tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

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(Reuters) -Businesses making everything from chips to steel reported downbeat results on Wednesday, with U.S. President Donald Trump’s trade war inflicting damage even as Japan’s deal lifted stocks and hopes that Europe can clinch a similar agreement.

Asian and European stock markets rallied as investors cheered a trade agreement between the United States and Japan, which lowers tariffs on auto imports and spares Tokyo punishing new levies on other goods. The news stirred hopes for a deal with the European Union ahead of the August 1 deadline set by the Trump administration. [MKTS/GLOB]

But results from Texas Instruments and steelmaker SSAB showed how chaotic U.S. trade policy has already hurt profits, adding to costs, upending supply chains and weighing on consumer confidence.

Texas Instruments’ quarterly earnings report pointed to weaker-than-expected demand for its analogue chips from some customers and underscored tariff-related uncertainty.

Chipmakers such as Texas Instruments are not yet directly facing Trump’s elevated tariffs, but the cost of chip-making tools has risen, and some of their end customers have pared back spending.

Late on Tuesday, Dutch computer chip equipment maker ASM International warned that order intake from chipmakers had been “lumpy” in the second quarter. Its shares fell 8.5% on Wednesday.

“Tariffs are hitting home,” said Neil Wilson, investment strategist at Saxo Markets.

Investors across the world are bracing for a slew of earnings this week that they hope will provide a window into how companies are navigating a torrent of challenges – from tariffs and regulatory changes to currency fluctuations, fickle consumer spending, higher prices, global conflicts and volatile oil prices.

As the second-quarter earnings season progresses, companies have reported a combined loss of $6.6 billion to $7.8 billion between July 16 and 22 for the full year, with the automotive, aerospace and pharmaceutical sectors being hurt the most by the tariffs.

General Motors accounted for a big chunk as it reiterated on Tuesday its expectation of a $4 billion to $5 billion hit from tariffs for 2025.

Late on Tuesday, Finland’s Nokia blamed tariff headwinds and the weaker U.S. dollar as it lowered its guidance for 2025.

For Swedish steelmaker SSAB, the biggest issue is that tariffs are causing more shipments of cheap steel to be redirected to Europe, CEO Johnny Sjostrom told Reuters on Wednesday.

“The turbulence of tariffs and trade barriers resulted in increased uncertainty,” he said in a statement, with the largest impact seen in the weakening European steel market.

EASING FEARS

All eyes are on Washington as governments scramble to close trade deals ahead of next week’s deadline that the White House has repeatedly pushed back under pressure from markets and intense lobbying by industry.

While the Japan deal has eased investor worries, the threat of higher tariffs on other large economies remains, including the European Union, Canada and Brazil. Trump has also threatened higher sectoral tariffs on pharmaceuticals, chips and copper.

“So this is far from the end,” said Deutsche Bank analysts following the Japan deal.

Some of the biggest companies to report earnings this week include Tesla, Google parent Alphabet, Nestle, LVMH, Nvidia supplier SK Hynix, Indian IT company Infosys and South Korea’s Hyundai Motor.

An EU-China summit on Thursday will also test European resolve and unity as the bloc faces intense trade pressure from both Beijing and the United States, while U.S. Treasury Secretary Scott Bessent meets Chinese officials in Sweden next week.

(Reporting by Reuters newsroomWriting by Anne Marie Roantree in Hong Kong and Josephine Mason in London; Editing by Kirsten Donovan)

President Trump and European Commission President Ursula von der Leyen announced Sunday that the US and EU had agreed to the framework of a trade deal that included a baseline tariff rate of 15% on EU goods imported into the US.

Trump, , speaking after negotiations in Scotland on Sunday, called the deal “the biggest of them all,” while von der Leyen said that “15% is not to be underestimated, but it is the best we could get.” Other details of the framework are still being confirmed.

Meanwhile, the South China Morning Post, a Hong Kong-based English-language newspaper, reported that “Beijing and Washington are expected to extend their tariff truce by another three months at trade talks in Stockholm beginning on Monday.”

On Friday, Trump said that letters dictating tariff rates for over 200 countries would go out soon while his administration works to clinch deals with larger trade partners. Trump said the US hasn’t had a “lot of luck” with Canada and suggested he may impose threatened 35% levies on goods not covered by the US-Canada-Mexico trade agreement.

Last week, President Trump touted a deal with Japan that included a $550 billion investment in the US and a 15% tariff on goods imported into the US from Japan. On Saturday, Japanese trade negotiator Ryosei Akazawa suggested the money could be used to help finance an unnamed Taiwanese chipmaker building plants in the US.

“For example, if a Taiwanese chipmaker builds a plant in the US and uses Japanese components or tailors its products to meet Japanese needs, that’s fine too,” he said.

In March, Taiwan’s TSMC announced a $100 billion investment in the US, on top of plans to build three plants in Arizona, one of which is already operating.

In any case, the Japan trade deal may have set a precedent for Trump’s new baseline tariff rate. Trump said tariffs would range from 15% to 50%, with tougher partners facing higher rates. That’s a step up from the 10% baseline duties currently in effect..

Read more: What Trump’s tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

LIVE

1525 updates

EU and US agree trade deal, with 15% tariffs for European exports to America

12 hours ago Share Save Sarah Smith BBC North America Editor, at Turnberry, Scotland Share Save

I think it’s the biggest deal ever made – Trump

The United States and European Union have agreed a trade deal, ending a months-long standoff between two of the world’s biggest economic partners. After make-or-break negotiations between President Donald Trump and European Commission President Ursula von der Leyen in Scotland, the pair agreed a US tariff on all EU goods of 15%. That is half the 30% import tax rate Trump had threatened to implement starting on Friday. He said the 27-member bloc would open its markets to US exporters with zero per cent tariffs on certain products. Von der Leyen also hailed the deal, saying it would bring stability for both allies, who together account for almost a third of global trade.

Trump has wielded tariffs against major US trade partners in a bid to reorder the global economy and trim the American trade deficit. As well as the EU, he has struck tariff agreements with the UK, Japan, Indonesia, the Philippines and Vietnam, although he has not achieved his goal of “90 deals in 90 days”. France’s European Affairs Minister Benjamin Haddad reacted to the deal early on Monday, saying it had some merits – such as exemptions for some key French business sectors such as spirits – but was unbalanced. “The trade agreement negotiated by the European Commission with the United States will bring temporary stability to economic actors threatened by the escalation of American tariffs, but it is unbalanced,” wrote Haddad on X. US-EU tariff deal a big Trump win but not a total defeat for Brussels Sunday’s agreement was announced after private talks between Trump and Von der Leyen at his Turnberry golf course in South Ayrshire. Trump – who is on a five-day visit to Scotland – said following their brief meeting: “We have reached a deal. It’s a good deal for everybody.” “It’s going to bring us closer together,” he added. Von der Leyen also hailed it as a “huge deal”, after “tough negotiations”. The EU’s top official described the deal as a “framework” agreement, with further technical details to be negotiated “over the next weeks”. The commission has the mandate to negotiate trade deals for the entire bloc – but it still requires approval by EU member states, whose ambassadors will meet on Monday for a debrief from the commission.

Trump plays his second round of golf this weekend at Turnberry before the EU talks

Trump said the EU would boost its investment in the US by $600bn (£446bn), including American military equipment, and spend $750bn on energy. That investment over the next three years in American liquified natural gas, oil and nuclear fuels would, von der Leyen said, help reduce European reliance on Russian power sources. Some goods will not attract any tariffs, including aircraft and plane parts, certain chemicals and some agricultural products. A separate deal on semiconductors may be announced soon. One key area where a deal is yet to be struck is alcohol, with France and the Netherlands in particular seeking tariff exemptions for their respective wine and beer industries. But a 50% US tariff Trump has implemented on steel and aluminium globally would stay in place, he said. “I want to thank President Trump personally for his personal commitment and his leadership to achieve this breakthrough,” Von der Leyen said. “He is a tough negotiator, but he is also a dealmaker.” Both sides can paint this agreement as something of a victory. For the EU, the tariffs could have been worse: it is not as good as the UK’s 10% tariff rate, but is the same as the 15% rate that Japan negotiated last week. For the US it equates to the expectation of roughly $90bn of tariff revenue into government coffers – based on last year’s trade figures, plus there’s hundreds of billions of dollars of investment now due to come into the US. One thing is clear: Trump is celebrating after striking the largest trade deal in history. While there is a lot of upside for the US in this deal, it is less clear what the EU gains. It was notable that Von der Leyen spoke about “rebalancing” the trading relationship. Previously the EU has argued the relationship is not out of balance as the EU buys far more services from America than it sells to them. It sounded as though von der Leyen was deliberately speaking Trump’s language in order to seal the agreement. It came after the US president finished 18 holes at the Turnberry resort with guests and family, including his son Eric, amid showery conditions.

Trade in goods between the EU and US totalled about $976bn last year. The US imported about $606bn in goods from the EU and exported around $370bn in 2024. That imbalance, or trade deficit, is a sticking point for Trump. He says trade relationships like this mean the US is “losing”. If he had followed through on tariffs against Europe, import taxes would have been levied on products from Spanish pharmaceuticals to Italian leather, German electronics and French cheese. The EU had said it was prepared to retaliate with tariffs on US goods including car parts, Boeing planes and beef.

Ayrshire bowlers give their verdict on Trump’s visit