The United States has struck new trade deals with Japan, Indonesia, and the Philippines, just days before the Trump administration’s self-imposed August 1 tariff deadline.
These deals, framed as part of a broader strategy to reassert American economic leverage, introduce sweeping tariff adjustments and large-scale foreign investments into the United States.
Key Points
Japan: The U.S. will impose a 15% reciprocal tariff on all Japanese imports — reduced from the previously threatened 25–27.5%.
Philippines: The U.S. will apply a 19% tariff on Philippine imports, slightly lower than the earlier proposed 20% rate.
Indonesia: Indonesian goods will face a 19% U.S. tariff, while 99% of U.S. exports to Indonesia will enter duty-free.
Trump announces trade deal with Japan, setting tariffs at 15%
President Trump and Japanese Prime Minister Shigeru Ishiba jointly announced a bilateral trade accord that institutes a 15% reciprocal tariff on all U.S. imports from Japan, significantly lower than the 25% rate Trump had threatened in a letter to Ishiba earlier this month. “Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things,” Trump wrote on Truth Social.
The agreement also commits Japan to invest $550 billion into the United States across several strategic sectors. According to a White House fact sheet, the funds will be directed toward energy infrastructure, semiconductor manufacturing, critical mineral processing, pharmaceutical production, and commercial and defense shipbuilding. “The U.S. will retain 90% of the profits from this investment – ensuring that American workers, taxpayers, and communities reap the overwhelming share of the benefit,” the statement said.
Prime Minister Ishiba welcomed the accord, stating: “I believe this will contribute to Japan and the United States working together to create jobs and promote high-quality manufacturing, thereby fulfilling various roles on the global stage moving forward.” Speaking to reporters in Tokyo, Ishiba noted, “We believe that this will contribute to the creation of jobs, the production of good products, and the fulfillment of various roles in the world through the mutual cooperation of Japan and the US.”
Japan’s top trade envoy, Ryosei Akazawa, emphasized that the agreement allows Tokyo to reduce tariffs on automobiles and parts without imposing volume restrictions. “Japan is the first in the world to be able to reduce tariffs on automobiles and auto parts without volume restrictions,” he said in Washington, D.C. on Tuesday. Japan also pledged to lift import barriers for U.S. cars and trucks and commit to purchasing 100 Boeing aircraft.
Japanese markets responded positively, with the Nikkei index climbing 3.7% on Wednesday, led by automotive sector gains.
Trade Pact with the Philippines
In a separate meeting at the White House, Trump finalized a trade deal with Philippine President Ferdinand “Bongbong” Marcos Jr., setting a new 19% U.S. tariff rate on goods imported from the Philippines—slightly below the previously proposed 20% threshold. The Philippines will in turn eliminate all tariffs on U.S. goods entering its market.
“It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs,” Trump announced on Truth Social. “We will work together Militarily. It was a Great Honor to be with the President. He is Highly Respected in his Country, as he should be. He is also a very good, and tough, negotiator.”
The Philippines ranks as the 33rd-largest U.S. trading partner, with two-way trade reaching approximately $23.5 billion in 2024. Key Philippine exports to the U.S. include semiconductors, IT/BPO services, electric machinery, garments, and agricultural products.
Indonesia Deal: US gains tariff-free access, while imposing 19% import duty
Later on Tuesday, the Trump administration unveiled a similar agreement with Indonesia, another key Indo-Pacific partner. Under the terms of the deal, Indonesian goods exported to the U.S. will face a 19% tariff rate, while American products sent to Indonesia will benefit from zero tariffs.
According to a joint statement, Indonesia agreed to remove nearly all tariff barriers, around 99%, on U.S. industrial, technological, and agricultural products. “The United States of America will now sell American-made products to Indonesia at a Tariff Rate of ZERO, while Indonesia will pay 19% on all of their products coming into the U.S.A. — The Best Market in the World!” Trump posted on Truth Social.
In addition to liberalizing trade, Indonesia committed to lifting export restrictions on critical minerals and to accept U.S. FDA certificates for pharmaceuticals and medical devices.
A senior administration official added that any goods “transshipped or contain a lot of content from certain countries” through Indonesia will be subject to a 40% tariff. U.S.-Indonesia trade totaled $38.3 billion in 2024, with key imports including electrical machinery, solar panels, palm oil, footwear, and cocoa derivatives.
August 1 tariff deadline looms
These three trade announcements follow weeks of intensified negotiations and a flurry of diplomatic letters sent by the Trump administration to global partners, outlining potential tariffs as high as 50% on certain imports. Trump described the Japan agreement as “the largest trade deal in history” and praised the new frameworks as models for future negotiations.
“They had their top people here, and we worked on it long and hard. And it’s a great deal for everybody,” Trump told lawmakers at a Republican reception Tuesday night. He emphasized that these agreements are designed to rebalance trade deficits, strengthen American manufacturing, and secure long-term economic resilience.
The administration has signaled that more trade announcements may follow as the August 1 deadline approaches, with unresolved talks ongoing with nations such as Vietnam, South Korea, and the European Union.