Revision of Tariffs on Japanese Goods Announced by US Authority
Revised Reciprocal Tariffs on Japanese Products Take Effect
In a significant development, the United States has revised its approach to applying reciprocal tariffs on Japanese products. The new system establishes a baseline reciprocal tariff rate of 15% on most Japanese goods entering the U.S. This replaces a previously higher tariff rate of 24–25% that was announced in April 2025.
Under the new U.S.-Japan Strategic Trade and Investment Agreement announced in July 2025, this 15% rate applies broadly, including to autos and auto parts, where the tariff was previously higher under Section 232 tariffs. The agreement also removed quantitative restrictions, allowing unlimited exports of vehicles and parts from Japan to the U.S.
In comparison, tariffs on products from the European Union (EU) are structured differently. The U.S. Executive Order (EO) framework sets a 15% ceiling for reciprocal tariffs on EU imports, but the actual tariff depends on the pre-existing Most-Favored-Nation (MFN) duty rate. If the EU’s MFN tariff rate is less than 15%, then the additional reciprocal tariff will increase it up to a total of 15%. If the EU’s MFN tariff rate is already 15% or higher, no additional reciprocal tariff is added.
Here's a comparison of the two systems:
| Aspect | Japan | European Union | |-----------------------------|--------------------------------------------|----------------------------------------| | Reciprocal Tariff Rate | Flat 15% on most goods, including autos | Capped at 15%, depends on existing MFN | | Application Method | Uniform baseline rate under trade deal | Additional duty to reach max 15% total | | Auto and auto parts tariffs | Now 15% (reduced from 25%) after deal | Varies depending on MFN rate | | Quantitative restrictions | Removed, allowing unlimited exports | Not specifically lifted under this EO |
The corrected tariff rates for Japanese products will be applied retroactively, and importers in the United States will be refunded the overpaid amount. However, no specific details were provided about the timeline for the revision of the executive order on reciprocal tariffs.
The mix-up over the tariffs on Japan was due to an executive order that did not comply with the agreement between Japan and the United States, according to Japanese Economic Revitalisation Minister Ryosei Akazawa. The White House official indicated that a revision will be made to the executive order on reciprocal tariffs.
It's worth noting that the exceptional measure applied only to the EU when the US reciprocal tariffs were introduced on Thursday. The revised method for applying reciprocal tariffs on Japanese products by the United States now mirrors that used with the EU once Washington reaches the stage of finalising its agreement with Tokyo.
References: 1. Bloomberg 2. Nikkei Asia 3. Reuters 4. U.S. Trade Representative 5. Office of the United States Trade Representative
- The policy-and-legislation surrounding reciprocal tariffs on Japanese products has undergone a change, lowering the tariff rate from 25% to a flat 15% on most goods, including autos and auto parts.
- In contrast, the structure of tariffs on products from the European Union (EU) is more complex, capping at 15% and depending on the pre-existing Most-Favored-Nation (MFN) duty rate.
- The new tariff rates for Japanese products will not only affect business and finance but also have cultural implications, as they signify a shift in the relationship between the United States and Japan that wasfluenced by the U.S.-Japan Strategic Trade and Investment Agreement.
- Politics and general news outlets, such as Bloomberg, Nikkei Asia, Reuters, and the Office of the United States Trade Representative, have been covering this development extensively, providing updates on the revised executive order on reciprocal tariffs.
