The deal includes an investment package of $550 billion.

Auto stocks soared on the news.

U.S. President Donald Trump struck a trade deal with Japan that lowers tariffs on auto imports and spares Tokyo from punishing new levies on other goods in exchange for a $550 billion package of U.S.-bound investment and loans.

It is the most significant of a clutch of agreements that Trump has bagged since unveiling sweeping global levies in April though, like other deals, exact details remained unclear.

As part of the deal, Japan will buy 100 Boeing planes and hike defense spending with U.S. firms to $17 billion annually, from $14 billion, a White House official said.
Japan's auto sector, which accounts for more than a quarter of its U.S. exports, will see existing tariffs cut to 15% from levies totaling 27.5% previously. Duties that were due to come into effect on other Japanese goods from August 1 will also be cut to 15% from 25%.
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The announcement Tuesday evening sent Japan's benchmark Nikkei stock index climbing almost 4% to its highest in a year, led by stocks in automakers with Toyota (7203.T) up more than 14% and Honda (7267.T) nearly 11%.

Wall Street opened higher on Wednesday, shoring up expectations of further agreements ahead of the fast-approaching August 1 deadline. The Dow Jones Industrial Average (.DJI) rose 158.7 points, or 0.36%, at the open to 44661.12.

"I just signed the largest TRADE DEAL in history with Japan," Trump said in announcing the deal on social media.

How Trump's Economy Continues To Defy The 'Experts' And Shock The 'Panicans'

For the "experts," the rapid pace of the administration's economic agenda has been shocking. For President Trump, this was all a part of the plan.

By Zach Jewell

In the first six months of President Donald Trump's second term, one major theme has defined Trump's economic record thus far: success that surprises the people who are paid to predict it.

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The latest numbers on the U.S. economy fly in the face of the naysayers, branded by Trump as "panicans." Late last week, the U.S. Census Bureau reported that June retail sales were up 0.6% from May and up 3.5% from last year. Food service and drinks sales jumped 6.6% from June 2024. Those numbers were, of course, better than what economists had predicted -- a phrase that has become a monthly tradition since Trump stepped back into the White House

According to University of Michigan surveys, American consumers expected prices to rise 6.6% this year. But so far, there's been no sign of inflation jumping through the roof, and even CNN had to admit last month, "Love tariffs or hate them, there's no denying inflation is lower now than when Trump took office."

The numbers don't lie: inflation under Trump has defied economists' predictions in nearly every month the president has been in office. In April, year-over-year inflation came in at 2.3%, its lowest annual rate in more than four years. The Consumer Price Index rose to just 2.4% in May compared to last year, which again was lower than what the "experts" predicted. Meanwhile, the Producer Price Index, which measures the average change over time in selling prices received by domestic producers, had its biggest drop in five years in April, falling 0.5%.

As inflation numbers continue to look good for the Trump administration, U.S. job growth also beat expectations in May and June while unemployment ticks down.

"During his first six months in office, President Trump has repeatedly embarrassed the panicans who predicted doom and gloom, from inflation to recession. Under President Trump, Americans have seen an end to Joe Biden's inflation crisis, multiple expectation-beating jobs reports, record tariff revenue collection, bond and stock market rallies, and historic investment commitments worth trillions that will cement America's dominance in cutting-edge sectors," White House Spokesman Kush Desai told The Daily Wire.