Japan auto tariffs cut down to 15%

American consumers will see reduced costs for Japanese vehicles under a new trade agreement that cuts import tariffs from 27.5% to 15% on automobiles.

An executive order signed by President Donald Trump Thursday implements the July framework deal, with automotive tariff reductions becoming effective seven days after publication and applying retroactively to Aug. 7. This means recent purchasers may receive refunds. Relief also extends beyond cars, as the agreement eliminates all tariffs on commercial aircraft and parts.

As part of the broader agreement, Japan commits to a $550 billion investment in U.S. projects chosen by American officials, while dramatically expanding agricultural imports including a 75% increase in rice purchases and $8 billion in annual commodity buying. The deal also prevents layering Trump’s country-specific tariffs on existing duties, ensuring Japanese goods face only the 15% baseline rate. Additional provisions include Japan’s purchase of 100 Boeing aircraft and increased defense equipment procurement worth billions annually.

The agreement’s implementation will be monitored as Japan faces the resignation of Prime Minister Shigeru Ishiba on Sunday, a day before his Liberal Democratic Party was to hold a leadership vote following defeats that took away its majority in the lower and upper houses.