Shaimaa Khalil
Tokyo correspondent

The timing of the trade agreement couldn’t be more crucial for Japan’s Prime Minister Shigeru Ishiba, who’s been under pressure to step down after his party’s ruling coalition lost its majority in the country’s upper house elections over the weekend.

That blow came after already lost its ruling majority in the more powerful lower house last year.

Ishiba, who now has no control over Japan’s legislative process, took responsibility for the bruising defeat.

The embattled prime minister had told a news conference he would remain in office to oversee tariff talks with the United States and other pressing matters, such as rising consumer prices that are straining the world’s fourth-largest economy.

Now that the tariff deal has been made with the US, it throws up more questions about his political future.

While he can sell this as a major ‘win’ with Washington after months of tense negotiations, many factions in Ishiba’s own party are questioning his leadership – and there’s still a possibility that the opposition could put forward a no-confidence motion.

Japan’s Prime Minister Shigeru Ishiba has welcomed Trump’s announcement and confirmed that he has reached a deal with the US.

“Japan’s tariff rate, which had been set to increase to 25% on reciprocal tariffs, was kept at 15%. This is the lowest figure to date among countries with trade surpluses with the US,” Ishiba said on Wednesday.

Ishiba also confirmed US import levies on Japanese vehicles would be cut to 15% from 25%.

“The agreement does not include any reduction of tariffs on the Japanese side, including on agricultural products,” he added.

“This is precisely the result of my consistent advocacy and strong lobbying of the US since I proposed ‘investment over tariffs’ to President Trump at our White House summit in February this year.”

Indonesia is the third country President Trump mentioned today, providing more details on an agreement that was announced last week

“It is agreed that Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers,” Trump wrote on his social media platform Truth Social on Tuesday night.

“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.”

Indonesia will also supply the US with critical minerals, Trump said, and sign deals worth “tens of billions of dollars” to purchase American products.

The US will levy a 19% tax on imports from the Philippines, Trump said after a meeting with the country’s president at the White House.

He wrote on social media on Tuesday that the new tariff was part of a wider pact, in which the Philippines would remove duties on US goods and the two countries would cooperate militarily.

“It was a beautiful visit, and we concluded our Trade Deal,” Trump wrote on Truth Social, offering no further details about the apparent agreement.

The plan, which was not immediately confirmed by the Philippines, would leave the country facing a tax even higher than what Trump had threatened when he first announced sweeping global tariffs in April.

But its lower than the 20% tariff he said he would charge on the country’s goods in a letter earlier this month.

The Philippines is a relatively small trade partner with the US, sending about $14.2bn worth of goods to America last year. That included car parts, electric machinery, textiles and coconut oil.

Japan was the fourth largest single-country export market for US agriculture and related products in 2022, valued at nearly $17bn (£12.5bn), according to a report from the International Trade Administration.

That year, the US was the country’s largest supplier of food and agricultural products, followed by the EU, China, Australia, and Thailand.

Japan was also the biggest export market for US beef and pork, valued at roughly $5bn combined, and the second largest market for US corn, valued at $3.3bn.

Suranjana Tewari
Asia Business Correspondent

Japan is the most significant of the clutch ofdeals President Trump has struck so far.

Trump has announcedframework agreements with Britain, Indonesia and Vietnam, though details are still yet to be worked out with all of those countries.

On Tuesday, Trump said the Philippines would pay a 19% tariff rate after what he called a “beautiful visit” by President Ferdinand Marcos Jr. to the White House,adding that US goods would pay zero tariffs.

Washington has also paused a tit-for-tat tariff battle with China, and has held talks in Geneva and London over a framework, although details are scant on that deal too.

Although Donald Trump announced a trade deal with Japan on Tuesday evening local time, the White House has yet to release details about the framework of the agreement.

In a post on Truth Social, the president said Japan would invest $550bn (£406bn) into the US, and that it would create hundreds of thousands of jobs. He also said Japan would pay reciprocal tariffs to the US in the amount of 15%, much lower than his previously proposed 25% tariff rate.

Japan’s Prime Minister Shigeru Ishiba recently confirmed the deal, and the country’s chief trade negotiator earlier said in a Facebook post that he had visited the White House, adding the hashtag “Mission accomplished”.

The unanswered questions following Trump’s announcement resembles other deals announced by the president in the past, which later ended up being delayed or modified.

At 15%, the deal represents a big cut in the tariffs that that Japan was facing.

In a letter sent to Tokyo this month, Trump threatened a 25% tariff on the country’s exports to the US if there wasn’t a new trade deal struck before 1 August.

That was one percentage point higher than the 24% rate announced during his so-called Liberation Day on 2 April.

The April tariffs plan, which included duties on many US trading partners across the globe, were paused for 90 days following worldwide market turmoil. It allowed Tokyo’s trade representatives time to negotiate with their counterparts in Washington.

Japan’s benchmark stock index, the Nikkei 225, was more than 2.5% higher after Trump’s announcement.

Shares in motor industry giants – including Toyota, Nissan and Honda – jumped after broadcaster NHK said existing tariffs on Japanese carmakers would be cut.

Japan’s Prime Minister Shigeru Ishiba later confirmed that the country’s carmakers would now face a 15% tariff on exports to the US, down from 25%.

Thanks for joining us as we bring you the latest updates on Donald Trump’s new trade deal announcements.

Trump says the US has agreed to a “massive” trade deal with Japan, one of the country’s largest trading partners.

Separately, he also announced that the US would levy a 19% tax on imports from the Philippines and Manila would remove duties on US goods – an agreement that is yet to be confirmed by the Philippines.

While the finer details of the deals remain vague, with the White House not having released any information, they nonetheless signal a major development in Trump’s tariffs war.