By: TPA News Desk | World Business News | www.thepointafricanews.com/business

Global financial markets, particularly the automotive sector, reacted with a significant surge today following President Donald Trump’s announcement of a new trade deal with Japan. The agreement, which includes a reduction in proposed tariffs on Japanese imports to the U.S., has been hailed by the Trump administration as a “massive Deal” that will create “hundreds of thousands of jobs.”

President Trump revealed late Tuesday that the U.S. and Japan have reached a trade framework that will impose a 15% tariff on Japanese goods entering the U.S. This rate is notably lower than the 25% tariff Trump had previously threatened to implement by August 1 if a deal was not secured. Key to the agreement, according to Trump, is Japan’s commitment to “open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products,” and a substantial US$550 billion investment into the United States “at my direction,” from which the U.S. is expected to receive “90% of the Profits.” Details on the structure of this investment remain unclear.

The news immediately sent Japanese auto stocks soaring. Mazda Motor saw a remarkable 17% increase, while Toyota rallied 11%, and Honda Motor Co. and Nissan Motor Corp. also experienced significant gains. The broader Nikkei 225 index in Tokyo surged by 2.6%. European auto shares also saw a rally, driven by optimism for similar trade agreements.

While the deal has brought immediate relief to markets, some analysts have expressed caution. Stefan Angrick of Moody’s Analytics warned that it’s “unlikely to be the final chapter in a saga that has bruised Japan’s economy,” noting that the 15% tariff is still higher than what Japan faced before recent escalations. Japan’s chief trade negotiator, Ryosei Akazawa, confirmed the tariff reduction on autos but clarified that existing 50% tariffs on steel and aluminum were not included in the deal and remain in place.

The agreement comes amidst increasing pressure on the Trump administration to finalize trade deals ahead of various tariff deadlines. This Japanese deal follows recent trade frameworks announced with the Philippines and Indonesia, as the U.S. seeks to reshape its global trade relationships.