Driving the news: President Trump has cut Japan's auto tariffs to 15% as part of a trade deal that includes a $550 billion Japanese investment package, according to Reuters.

For context: The agreement also caps tariffs on other Japanese goods at 15% instead of the 25% rate that was set to kick in August 1, marking one of Trump's most significant trade deals since imposing sweeping global levies in April.

  • Two-way trade between the countries reached nearly $230 billion in 2024, with Japan running a $70 billion surplus.

  • Japan's auto sector represents over a quarter of its U.S. exports.

Why it matters: President Trump's tariff strategy is forcing major trading partners to negotiate significant concessions and investment commitments.

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