Implementing The United States–Japan Agreement
This Presidential order implements a framework agreement with Japan, aiming to create a more balanced and reciprocal trade relationship.
It establishes a 15% baseline tariff on most Japanese imports, but provides exceptions for certain goods like generic pharmaceuticals and natural resources unavailable in the US. Japan, in return, commits to significantly increased purchases of US agricultural products and a substantial $550 billion investment in the American economy, targeted by the US Government.
The order also modifies or eliminates previous tariffs on aerospace products and automobiles in light of the new agreement, with specific agencies tasked to oversee the implementation and monitor progress.
This aims to enhance national security and increase economic growth.
Arguments For
Increased economic growth: The agreement promises to reduce the trade deficit, boost the US economy, and strengthen its manufacturing and defense industrial base through increased exports and Japanese investment.
Enhanced national security: The agreement addresses national security threats identified in previous proclamations concerning steel, aluminum, automobiles, and copper imports, and strengthens the US defense industrial base through Japanese purchases of defense equipment.
Reciprocity and fair trade: The framework establishes reciprocal trade practices, levelling the playing field for American producers and ensuring more balanced trade relations with Japan.
Job creation: The $550 billion in Japanese investment into the US, selected by the US government, is expected to generate hundreds of thousands of jobs.
Improved market access for US goods: Japanese commitments secure breakthrough market access for American producers of manufacturing, aerospace, agriculture, food, energy, automobile, and industrial goods in key sectors, including significant increases in US agricultural product purchases.
Arguments Against
Potential negative impact on certain US industries: The 15% baseline tariff on nearly all Japanese imports could negatively impact some US businesses reliant on cheaper Japanese goods.
Implementation challenges: Ensuring Japan fulfills its commitments regarding investment and market access requires ongoing monitoring and potential enforcement mechanisms. The large-scale of the investments necessitate meticulous coordination and strategic planning.
Unintended economic consequences: The implementation of the agreement's economic provisions may have unpredictable side effects for related industries and trade partners beyond Japan.
Concerns about national sovereignty: The Government's selection of Japanese investments in US industries could raise concerns regarding national control and potential dependency.
Potential for trade disputes: Even with the agreement in place, future tariff adjustments or disputes might arise depending on ongoing market dynamics and the actions of other international trade players.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) (section 232), section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), and section 301 of title 3, United States Code, I hereby determine and order:
This introductory section establishes the legal basis for the Presidential order, citing various acts and laws that grant the President authority to take the actions detailed in the document.
It explicitly outlines the President's use of emergency economic powers and trade legislation to shape the agreement.
Section 1. Background. On July 22, 2025, I announced a framework agreement between the United States and Japan (Agreement), which lays the foundation for a new era of United States-Japan trade relations grounded in principles of reciprocity and our shared national interests. The Agreement establishes a tariff framework that levels the playing field for American producers and accounts for American national security needs. In my judgment, the Agreement is necessary and appropriate to address the national emergency declared in Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits), as amended, and to reduce or eliminate the threats to national security found in Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum Into the United States), as amended; Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel Into the United States), as amended; Proclamation 9888 of May 17, 2019 (Adjusting Imports of Automobiles and Automobile Parts Into the United States), as amended; and Proclamation 10962 of July 30, 2025 (Adjusting Imports of Copper Into the United States). The Agreement will reduce the United States trade deficit, boost the economy of the United States, and address the consequences of the United States trade deficit, including by strengthening the manufacturing and defense industrial base of the United States.
Under the Agreement, the United States will apply a baseline 15 percent tariff on nearly all Japanese imports entering the United States, alongside separate sector-specific treatment for automobiles and automobile parts; aerospace products; generic pharmaceuticals; and natural resources that are not naturally available or produced in the United States. This new tariff framework, combined with expanded United States exports and investment-driven production, will help reduce the trade deficit with Japan and restore greater balance to the overall United States trade position.
Japan, meanwhile, will provide American manufacturing, aerospace, agriculture, food, energy, automobile, and industrial goods producers with breakthrough openings in market access across key sectors. Specifically, the Government of Japan is working toward an expedited implementation of a 75 percent increase of United States rice procurements within the Minimum Access rice scheme and purchases of United States agricultural goods, including corn, soybeans, fertilizer, bioethanol (including for sustainable aviation fuel), as well as other United States products, in amounts totaling $8 billion per year. The Government of Japan is also working to accept for sale in Japan United States-manufactured and United States-safety-certified passenger vehicles without additional testing. Separately, Japan will purchase United States-made commercial aircraft, as well as United States defense equipment.
Critically, unlike any other agreement in American history, the Government of Japan has agreed to invest $550 billion in the United States. These investments — which will be selected by the United States Government — will generate hundreds of thousands of United States jobs, expand domestic manufacturing, and secure American prosperity for generations.
In my judgment, I determine that the following actions are consistent with the national interest of the United States and are necessary and appropriate to address the national emergency declared in Executive Order 14257, as amended, and to reduce or eliminate the threats to national security found in Proclamation 9704, as amended; Proclamation 9705, as amended; Proclamation 9888, as amended; and Proclamation 10962.
This section provides context for the order.
It summarizes the US-Japan agreement, highlighting its goal of fair and reciprocal trade, and its benefits (reducing trade deficits, economic growth, national security improvements) and components (tariffs, market access, Japanese investments).
The section frames the agreement as addressing previously declared national emergencies related to trade imbalances and national security concerns.
Finally, it explicitly asserts that the following actions are in the national interest and necessary to address those emergencies.
Sec. 2. General Tariffs. (a) The additional ad valorem rate of duty applicable to products of Japan shall be determined by a product’s current ad valorem (or ad valorem equivalent) rate of duty under column 1 of the Harmonized Tariff Schedule of the United States (HTSUS) ("Column 1 Duty Rate"). For a product of Japan with a Column 1 Duty Rate in the HTSUS that is less than 15 percent, the sum of its Column 1 Duty Rate and the additional ad valorem rate of duty pursuant to this order shall be 15 percent. For a product of Japan with a Column 1 Duty Rate that is at least 15 percent, the additional rate of duty pursuant to this order shall be zero percent. Treatment of specific or compound duty rates shall be identical to the treatment provided to products of the European Union as outlined in Executive Order 14326 of July 31, 2025 (Further Modifying the Reciprocal Tariff Rates). The duties described in this subsection shall apply in lieu of the additional ad valorem duties previously imposed on products of Japan under Executive Order 14257, as amended.
(b) Except as provided in subsection (a) of this section, the terms of Executive Order 14257, as amended, shall continue to apply to products of Japan.
(c) The Secretary of Commerce (Secretary), in consultation with the United States Trade Representative; the Secretary of Homeland Security, acting through the Commissioner of U.S. Customs and Border Protection (CBP); and the Chair of the United States International Trade Commission (ITC), shall determine whether modifications to the HTSUS are necessary or appropriate to effectuate this order and may make such modifications through notice in the Federal Register.
(d) The tariffs set forth in subsection (a) of this section shall apply retroactively to products of Japan entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern daylight time on August 7, 2025. Any refunds shall be processed pursuant to applicable laws and CBP’s standard procedures for such refunds.
(e) The Secretary may issue rules, regulations, guidance, and procedures to carry out the provisions of this section, including rules for determining what are “products of Japan” for purposes of this section.
This section details the general tariff policy for Japanese imports.
A 15% baseline tariff will be applied to most goods, but this only applies to products with an existing tariff below 15%.
Products with existing tariffs of 15% or higher will not have the additional tariff applied.
The existing tariff system will continue to apply for goods not specified in this section, unless otherwise stated.
The Secretary of Commerce and other agencies are tasked with updating the tariff schedule and implementing these changes, including providing the specific definitions needed to apply the policy effectively.
The new tariffs apply retroactively to a specified date, and existing regulations cover the process of issuing refunds.
The Secretary of Commerce is given authority issue rules to clarify the details of enforcement.
Sec. 3. Aerospace. (a) With respect to products of Japan that fall under the World Trade Organization Agreement on Trade in Civil Aircraft, except for unmanned aircraft, the tariffs imposed through the following Presidential actions and subsequent amendments to those actions shall no longer apply, as of the date of publication of the Federal Register notice described in subsection (b) of this section:
(i) Executive Order 14257, as amended;
(ii) Proclamation 9704, as amended;
(iii) Proclamation 9705, as amended; and
(iv) Proclamation 10962.
(b) Within 7 days of the date of publication of this order in the Federal Register, the Secretary, in consultation with the Chair of the ITC and the Commissioner of CBP, shall publish a notice in the Federal Register modifying the HTSUS consistent with this section.
(c) The Secretary may issue rules, regulations, guidance, and procedures to carry out the provisions of this section, including rules for determining what are “products of Japan” for purposes of this section.
This section addresses tariffs on aerospace products.
Tariffs previously imposed on products covered in agreements related to civilian aircraft (not including unmanned aircraft) are removed.
The Secretary of Commerce, in consultation with other agencies, will issue a related notice updating the Harmonized Tariff Schedule of the United States (HTSUS) to reflect the change.
The Secretary of Commerce is also given authority to create rules for implementing section 3.
Sec. 4. Automobiles and Automobile Parts. (a) As of the date of publication of the Federal Register notice described in subsection (b) of this section, in lieu of the additional section 232 ad valorem duties imposed on products of Japan in Proclamation 10908 of March 26, 2025 (Adjusting Imports of Automobiles and Automobile Parts Into the United States), as amended, the additional ad valorem rate of duty applicable to an automobile or automobile part that is a product of Japan and subject to duties under Proclamation 10908, as amended, shall be determined by the product’s Column 1 Duty Rate. For a product of Japan with a Column 1 Duty Rate that is less than 15 percent, the sum of its Column 1 Duty Rate and the additional automobile or automobile part section 232 ad valorem rate of duty pursuant to this order shall be 15 percent. For a product of Japan with a Column 1 Duty Rate that is at least 15 percent, the additional automobile or automobile part section 232 ad valorem rate of duty imposed shall be zero percent.
(b) Within 7 days of the date of publication of this order in the Federal Register, the Secretary, in consultation with the Chair of the ITC and the Commissioner of CBP, shall publish a notice in the Federal Register modifying the HTSUS consistent with this section.
(c) The Secretary may issue rules, regulations, guidance, and procedures to carry out the provisions of this section, including rules for determining whether automobiles and automobile parts are “products of Japan” for purposes of this section.
This section specifies tariff adjustments for automobiles and automobile parts.
Similar to the general tariffs, it uses the existing tariff rate (Column 1) as a base, increasing it to 15% for products with current tariffs below 15% and leaving those with existing tariffs at 15% or higher unchanged.
The Secretary of Commerce, in collaboration with relevant agencies, mandates publishing a notice in the Federal Register to officially update the HTSUS and further details the Secretary's right to issue additional clarifying rules.
Sec. 5. Products Not Subject to Reciprocal Tariffs. (a) To implement the terms of the Agreement, the Secretary is authorized to modify the reciprocal tariff rate imposed under Executive Order 14257, as amended, to zero percent for products of Japan that are natural resources unavailable (or unavailable at sufficient scale to satisfy domestic demand) in the United States, generic pharmaceuticals, generic pharmaceutical ingredients, and generic pharmaceutical chemical precursors.
(b) In determining when and for which products to modify the reciprocal tariff rate to zero percent, the Secretary shall act in a manner consistent with the national interests of the United States; the purposes of this order; the need to deal with the national emergency declared in Executive Order 14257, as amended; and the need to reduce or eliminate the threats to national security that I found pursuant to section 232. The Secretary shall also consider factors he deems appropriate, including the scope and nature of the commitments of the Government of Japan under the Agreement; the scope and nature of the commitments of the United States under the Agreement; the actions taken by the Government of Japan to implement its commitments under the Agreement; and the actions taken by the United States to implement its commitments under the Agreement.
This section describes exceptions to the reciprocal tariff.
Certain products -- natural resources not found in sufficient quantity in the US, generic pharmaceuticals (ingredients and precursors included) -- will have their tariffs adjusted to zero percent to reflect the agreement.
The Secretary of Commerce is authorized to decide based on various factors, balancing national interest with the goals of national security, and the commitments of both countries.
Sec. 6. Monitoring and Modifications. (a) The Secretary shall monitor the progress of Japan’s implementation of its commitments under the Agreement and shall, from time to time, update me on the status of Japan’s implementation.
(b) Should Japan fail to implement its commitments under the Agreement, I may modify this order as necessary to deal with the emergency declared in Executive Order 14257, as amended, and to reduce or eliminate the threats to national security found in Proclamation 9704, as amended; Proclamation 9705, as amended; Proclamation 9888, as amended; and Proclamation 10962.
This section details monitoring and modification plans.
The Secretary of Commerce is responsible for overseeing Japan's actions to meet the agreement's terms and regularly informs the President.
If Japan fails, the President can adjust the order to maintain the goals of national security and resolve the trade deficit.
Sec. 7. Delegation. (a) Consistent with applicable law, the Secretary and the Secretary of Homeland Security are directed and authorized to take all necessary actions to implement and effectuate this order — including through temporary suspension or amendment of regulations or through notices in the Federal Register and by adopting rules, regulations, or guidance — and to employ all powers granted to the President, including those granted by IEEPA and section 232, as may be necessary to implement and effectuate this order.
(b) The Secretary of Homeland Security, in consultation with the Chair of the ITC, shall determine whether additional modifications to the HTSUS are necessary to effectuate this order and may make such modifications through notice in the Federal Register. The Secretary of Homeland Security shall consult with any senior officials she deems appropriate.
(c) Consistent with applicable law, the Secretary and the Secretary of Homeland Security may, consistent with applicable law, redelegate any of these functions within their respective department or agency.
(d) All executive departments and agencies shall take all appropriate measures within their authority to implement this order.
This section outlines the delegation of authority.
The Secretaries of Commerce and Homeland Security are granted broad power to execute this order, able to modify regulations and make announcements in the Federal Register.
The Secretary of Homeland Security takes charge of reviewing additional HTSUS modifications, working with the relevant authorities.
Both Secretaries can delegate these functions within their departments, and all relevant federal departments must fully cooperate to implement the policy.
Sec. 8. Interaction With Other Presidential Actions. Any provision of previous proclamations and Executive Orders that is inconsistent with the actions directed in this order is superseded to the extent of such inconsistency.
This section clarifies that any prior executive orders or proclamations conflicting with this order are overridden to the extent of that conflict.
This ensures consistency and prioritizes the current Presidential action.
Sec. 9. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The costs for publication of this order shall be borne by the Department of Commerce.
This section addresses general legal considerations.
It emphasizes it avoids impacting other existing government authority or the Office of Management and Budget's budgetary responsibilities.
The order must follow the law and funding availability and does not create any legally enforceable rights.
Finally, it specifies that the Department of Commerce is responsible for the publication costs.