US Commits to Removing Stacked Tariffs on Japanese Goods

The 15 percent tariff agreed upon in July will not be imposed on Japanese goods already subject to higher tariffs.

New Toyota vehicles stored at an import processing facility at the Port of Long Beach in California on March 26, 2025. Damian Dovarganes/AP Photo

The White House will remove overlapping tariffs on Japanese imports entering the United States, according to Tokyo’s top trade negotiator.

Following high-level discussions in Washington, senior administration officials have agreed to revise a presidential executive order to ensure that the 15 percent tariff agreed upon in July will not be applied to Japanese goods already subject to higher tariff rates.

Ryosei Akazawa announced that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have pledged to amend the July 31 directive, which included a no-stacking provision for the European Union but omitted Japan.

U.S. authorities will also issue refunds for any excess import duties previously collected.

Prior to the meeting in the nation’s capital, Japanese Prime Minister Shigeru Ishiba expressed concern over the “no stacking” provision in the edict.

“We have confirmed with the U.S. that there is no discrepancy,” Ishiba told reporters on Aug. 6. “Japan is strongly requesting the U.S. to swiftly amend the executive order.”

Meanwhile, Akazawa stated that Bessent and Lutnick confirmed President Donald Trump will issue a separate executive order reducing auto tariffs on Japanese vehicles from 27.5 percent to 15 percent.

This adjustment aligns with the bilateral trade agreement between the two nations last month.

First-Quarter Front-Loading

Japan’s Nikkei surged 761 points, or 1.85 percent, on greater tariff clarity and solid corporate earnings. The broader Topix, a weighted stock market index, topped 3,000 for the first time.

Whether strong corporate earnings persist remains to be seen, especially as U.S. tariffs take effect. ING senior economist Min Joo Kang says the first-half jump in Japanese exports “isn’t shielding profit margins from tariff pain.”

“Exports spiked in the first quarter amid front-loading, but it led to a significant technical correction in the second quarter,” Kang said in an Aug. 1 note. “Cutting prices might have helped absorb some tariff impacts, but it’s sacrificing profit margins.”

In June, Japanese automakers lowered their export prices to the United States by almost 20 percent, the sharpest decline in nearly a decade. The drop was fueled by broader industry efforts to remain competitive in the world’s largest economy and maintain its market share.

Japan’s Toyota Motor warned of lower profits from the president’s tariffs on automobiles imported into the United States. The world’s top-selling automaker reduced its forecast for full-year operating profit by 16 percent.

“It’s honestly very difficult for us to predict what will happen regarding the market environment,” Takanori Azuma, Toyota’s head of finance, said at an Aug. 7 briefing.

Foreigners absorbing tariff-related costs by lowering prices and sacrificing profit margins could be a factor for this year’s low import prices in the United States. Pre-levy stockpiling, substitutions, exemptions, and delays could also be factors contributing to the lack of price increases in imports.

Last month, import prices edged up 0.1 percent, and the consensus forecast suggests the July data will be flat.

Domestically, meanwhile, profit margins are holding steady, says Nancy Tengler, CEO and CIO at Laffer Tengler Investments.

“We listen to the companies and we are hearing that AI is improving employee productivity. Even with tariffs, margins are holding up and even expanding. We believe we are just getting started,” Tengler said in a note emailed to The Epoch Times.

According to FactSet Insights, 81 percent of S&P 500 companies reported positive second-quarter earnings.

U.S. stocks ticked higher to close out the trading week, led by a 1 percent gain in the tech-heavy Nasdaq Composite Index.

The July Deal

In July, the United States and Japan reached a bilateral economic agreement that will feature a 15 percent reciprocal tariff on most goods traded between the two economies.

Tokyo will invest $550 billion in the U.S. economy and open its market to American goods, including automobiles and agriculture.

The administration aims to rebalance U.S.-Japan trade and reduce the U.S. trade deficit with Japan, which totaled almost $70 billion in 2024.

Trump, writing in a Truth Social post, hailed the deal by predicting it would produce “hundreds of thousands of jobs.”

“There has never been anything like it,” the president said on his social media platform.

The Epoch Times reached out to the Treasury Department and the White House for comment.

Reuters contributed to this report.