Trump Announces Trade Deal with Japan

That rate is lower than the 24% that Trump threatened Japan with on April 2 and the 25% he said he would hit Japanese imports with in a letter on July 7. Before Trump's current term, the effective U.S. tariff rate on Japanese imports was less than 2%, according to World Bank data.

Since Trump's so-called Liberation Day on April 2, the administration has yet to strike any formal trade deals, instead signing a handful of framework deals that can be turned into fully fledged deals later.

Japan has been furiously trying to avoid as much of a hit from Trump's global tariffs as possible. Japan's lead trade negotiator has visited the United States at least eight times, most recently Monday, when he met with Commerce Secretary Howard Lutnick for more than two hours.

Japan was the fifth-biggest source of U.S. imports last year, with American consumers and companies buying nearly $150 billion of goods from the country, according to Commerce Department data.

The talks with Japan came at a tough time politically for Japan's government. Prime Minister Shigeru Ishiba's ruling party recently lost both houses of parliament. Ishiba pledged to stay on as leader, in part to address economic headwinds.

Trump had recently downplayed the chances of an agreement with Japan.

"The Japanese are tough, but ultimately you have to understand we're just going to send a letter saying, 'This is what you're going to pay, otherwise you don't have to do business with us.' But there's a chance," he said June 16.

In May, Trump approved a long-delayed takeover of U.S. Steel by Japan's Nippon Steel. As part of the deal, Nippon agreed to create at least 70,000 jobs through a $14 billion investment, according to both companies and the White House. The companies later upped that to 100,000 jobs but clarified that the additions included "direct, indirect, and induced jobs."