Japan Disputes Key Claims in US Investment and Trade Deal
From investment figures to tariff rates and rice imports, Japan’s version of the deal challenges Trump’s announcements
As with previous US trade announcements involving the UK, Vietnam, and Indonesia, key differences have emerged between US President Donald Trump’s statements and Japan’s official version of their bilateral agreement.
Trump claimed Japan would invest $550 billion in the US, with 90% of the profits remaining in America. However, Japan clarified that the $550 billion figure includes a mix of equity, loans, and guarantees from state-backed institutions—not a direct investment. The actual return split will depend on each side’s investment and risk, according to Japan. Trade policy think tank GTRI questioned, “Does this mean Japan would only put in 10% of the money, while the US covers the remaining 90%? If Japan pays $550 billion, will the US need to invest $4,950 billion?”
Tariff-related discrepancies also surfaced. While Trump announced a 15% reciprocal tariff on Japanese imports, Japan specified that if a product’s MFN (Most Favored Nation) tariff is already 15% or more, no new tariff will be added. If the MFN tariff is below 15%, the total tariff will be capped at 15%.
For automobiles and auto parts, the US has reduced the proposed 25% additional tariff to 15%, which, when added to the existing 2.5% MFN auto tariff, totals roughly 15%, not the 17.5% implied earlier. Japan noted this as a positive precedent for India, suggesting potential tariff easing in the sector.
Trump also claimed that Japan would remove additional safety testing for US-made vehicles. However, Japan clarified that imports will only be exempt from further testing if they already meet Japanese road safety standards—there is no blanket exemption.
Regarding rice imports, Trump suggested Japan had agreed to open its market for US rice. But Japan’s version restricts procurement to its existing Minimum Access (MA) scheme, and only “depending on domestic demand and supply conditions.” This effectively means Japan reserves the right not to import US rice, countering any suggestion of guaranteed access. According to GTRI, the differences significantly water down the sweeping commitments claimed by the US.
