On September 4, 2025, the White House announced a new trade agreement between the United States and Japan. The framework aims to realign tariff treatment and address national security concerns related to trade. This new agreement will have a significant impact on U.S. importers and the broader trade landscape between the two nations.
The agreement was established under the authority of the International Emergency Economic Powers Act (IEEPA) and Section 232 of the Trade Expansion Act of 1962. It introduces a new tariff structure and includes substantial investment and procurement commitments from Japan.
Key details of the tariff structure
The agreement sets a new baseline tariff of 15% on most goods imported from Japan.
General Tariffs: For products with a Column 1 duty rate below 15%, an additional tariff will be applied to bring the total rate to 15%. If a product’s existing Column 1 duty rate is already 15% or higher, no additional tariff will be applied. This new general tariff is effective retroactively to August 7, 2025.
Refund Eligibility: Importers who have made entries on or after the effective date may be eligible for refunds on duties paid. You can seek these refunds through the standard procedures of U.S. Customs and Border Protection (CBP).
A key provision grants the Secretary of Commerce the authority to define what constitutes a “Product of Japan,” which will be important for determining tariff applicability.
Sector-specific tariff treatments
The agreement includes special provisions for several key industries, moving away from a one-size-fits-all approach.
Automobiles and Automobile Parts: These goods will be subject to the same 15% tariff baseline application. However, this rate will not be applied retroactively and will become effective within seven days of its publication in the Federal Register.
Aerospace Products: For Japanese products covered under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft, all reciprocal and Section 232 tariffs will be reduced to 0%. This change will also take effect within seven days of Federal Register publication.
Exempt Products: Certain products will be exempt from the new reciprocal tariffs. This includes natural resources not available in sufficient quantities in the U.S., as well as generic pharmaceuticals and their ingredients. These items will have a 0% reciprocal tariff rate.
Japan’s commitments and the expected effect on trade
Beyond tariffs, the agreement includes significant commitments from Japan intended to balance trade between the two countries.
Japan has agreed to invest $550 billion in the United States. These investments, which will be selected by the U.S. government, are expected to support domestic manufacturing and create jobs.
Additionally, Japan will increase its procurement of U.S. goods. This includes an $8 billion annual purchase of agricultural products like corn, soybeans, and fertilizer. Japan also plans to purchase U.S.-made commercial aircraft and defense equipment and streamline the process for accepting U.S.-manufactured vehicles for sale.
Next steps for the trade community
This agreement introduces several changes that will require attention from U.S. importers and other stakeholders. It is important to stay informed and take proactive steps to ensure compliance and manage costs.
We recommend that importers:
• Monitor the Federal Register for official notices that will implement the sector-specific tariff rates for automobiles and aerospace products.
• Watch for any guidance from the Department of Commerce that defines what qualifies as a “Product of Japan.”
• Review their import entries filed on or after August 7, 2025, to identify potential refund opportunities.
• Update their internal tariff databases and compliance procedures to reflect these new rates.
Taking these steps will help U.S. importers navigate the changes smoothly and make the most of the opportunities presented by this new trade framework.