Implementing the United States-Japan Agreement
The order implements a US-Japan trade agreement by applying a 15% baseline tariff on nearly all Japanese imports, with special reduced or zero-duty treatment for aerospace products, automobiles, generic pharmaceuticals, and certain natural resources not available in the United States.
It takes effect retroactively to August 7, 2025, and is tied to Japanese commitments the order describes as unprecedented — including $550 billion in US-selected investments and $8 billion per year in US agricultural purchases.
What this order does
What it orders
The order implements a US-Japan trade agreement by applying a 15% baseline tariff on nearly all Japanese imports: products with existing tariff rates below 15% are topped up to that level, while products already at 15% or above receive no additional duty. Aerospace products covered by the WTO civil aircraft agreement are exempted from all applicable reciprocal, aluminum, steel, and copper tariffs. Automobiles and auto parts receive a parallel 15% floor treatment in place of prior national-security tariffs. The Secretary of Commerce may separately reduce tariffs to zero for generic pharmaceuticals, pharmaceutical ingredients, and natural resources unavailable at sufficient domestic scale.
The tariffs apply retroactively to Japanese goods entered on or after August 7, 2025, with US Customs and Border Protection processing refunds for any overpayments under prior rates. The Secretary of Commerce monitors Japan's compliance with its commitments and reports to the President, who retains authority to reimpose higher tariffs if Japan fails to deliver on its obligations.
Who it affects
US importers of Japanese goods across all sectors — particularly automakers, aerospace firms, pharmaceutical importers, and consumer-product retailers — face the new 15% baseline tariff retroactive to August 7, 2025. American agricultural, energy, and aerospace exporters stand to benefit from the expanded Japanese market-access commitments under the agreement.
Why it matters
US businesses that imported Japanese goods after August 7, 2025, owe the new tariff retroactively, requiring immediate cost recalculation and customs adjustments. Automakers and aerospace companies face restructured duty rates on parts and equipment; consumers of Japanese-origin products may see higher prices as importers pass through the new costs.
What must happen and when
How the order is supposed to work
The Commerce Secretary and DHS Secretary hold broad delegated authority to implement the order through Federal Register notices, regulatory amendments, and CBP procedures. Two mandatory steps — modifying the Harmonized Tariff Schedule for aerospace products and for automobiles — must be published within 7 days of this order's Federal Register publication. The general 15% tariff is self-executing and retroactive to August 7, 2025, with CBP handling any resulting refunds. Commerce monitors Japan's ongoing commitments and reports to the President, who may reimpose higher rates if Japan underperforms. No sunset clause is specified.
Actions and deadlines
- Publish a Federal Register notice modifying the Harmonized Tariff Schedule to implement aerospace tariff exemptions
- Publish a Federal Register notice modifying the Harmonized Tariff Schedule to implement the automobile and auto parts tariff changes
- Monitor Japan's implementation of its commitments under the Agreement and provide periodic updates to the President
- Apply general 15% baseline tariff retroactively to qualifying Japanese imports entered on or after August 7, 2025