Tariff Tracker, July 23: Trump’s 3 trade deals with Japan, Philippines, Indonesia

Thus far, the US has announced trade deals with the UK and Indonesia, and committed to a tariff de-escalation with China. Further details are awaited on the announced trade deal with Vietnam.

Ending the impasse with Japan

Donald Trump on Tuesday announced that he had reached a “massive trade deal” with Japan, which will impose 15% tariffs on Japanese imports into the US and see Japan invest $550 billion in the US. Trump had announced 24% ‘reciprocal’ tariffs on Japan, in addition to the 10% baseline for all countries, on April 2, which he had called Liberation Day.

“I just signed the largest trade deal in history – I think maybe the largest deal in history – with Japan,” Trump said at an event at the White House on Tuesday after announcing the deal on social media. “And that was done with Japan. They had their top people here and we worked on it long and hard and it’s a great deal for everybody.”

Trump also said that Japan would “open” its markets to American cars and rice, which had been a point of contention during the negotiations. According to a Bloomberg report, US trade negotiators had pressed upon trading partners, including Japan, to accept cars complying with US federal motor vehicle safety standards, instead of subjecting them to different requirements.

The Japanese delegation had long sought a reduction in tariffs from the 24% duty declared by Trump among his country-specific “reciprocal” tariffs on Liberation Day, but the talks were derailed by the separate 25% duty on automobiles. According to Japanese Prime Minister Shigeru Ishiba, Japan’s auto tariffs – part of a separate tariff schedule – would also be reduced to 15% from 25%, without any import quota, the Financial Times reported.

US goods trade with Japan was valued at $227.9 billion in 2024, according to US Trade Representative data. Notably, the Japanese automotive sector has been a vital part of its $63 billion trade surplus with the US.

Trump also announced a US-Japan joint venture in Alaska on liquefied natural gas, which The New York Times has identified as a $44 billion plan called Alaska LNG, aiming to ship natural gas from Alaska to buyers in Asia.

Notably, the trade deal announcement came a day after Ishiba’s Liberal Democratic Party lost its majority in the upper house of the parliament. However, the Prime Minister told reporters on Wednesday (July 23) that he would remain in the post to prevent ‘political instability’ ahead of the August 1 tariff deadline.

Philippines on Trump’s “good list”

Earlier in the day, Trump announced a trade deal with the Philippines after meeting its president, Ferdinand Marcos Jr.

“The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff. In addition, we will work together Militarily,” Trump wrote in a social media post.

Marcos reportedly confirmed the suspension of tariffs on American automobiles, as well as increased imports of soybeans, wheat and pharma products from the US, according to Filipino newspaper The Inquirer. However, it is presently unclear if the latter three are exempt from Filipino tariffs. Earlier, the Philippines had said that it would not be able to offer the US a zero tariff because it would hurt domestic businesses.

The 19% duty is higher than the 17% reciprocal tariffs Trump originally imposed on the country in April. Earlier this month, however, Trump threatened to raise this duty to 20% from August 1. Marcos sought to portray the 1% reduction in the tariff rate as a win for the country.

“When we arrived in Washington, tariff rates were 20%. So why they came up from 17% to 20% is an internal matter with the United States government,” he said. “We tried very hard to see what we can do and we managed a 1 [percentage point] decrease in tariff rates.”

In 2024, the two countries had a total goods trade of $23.5 billion, according to USTR data, with the US trade deficit valued at $4.9 billion in 2024, a 21.8% increase ($873.3 million) over the previous year. Data from the Philippines Statistics Authority indicated that the US accounted for 16.6% of its exports in 2024.

Terms of trade deal with Indonesia

While the US entered into a trade deal with Indonesia last week, the details of the agreement were revealed in a joint statement between the two nations published Tuesday.

“Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers,” Trump wrote in a social media post.

Indonesia will remove 99% of its current tariffs on a range of industrial and agrifood products from the US, and eliminate all non-tariff barriers to US goods. Under the agreement, Indonesia would also stop taxing data flows that American tech companies rely on and eliminating taxes on digital service revenue, such as advertising on streaming and social media sites, and “pre-shipment inspection or verification requirements” on American goods, CNN reported.

Indonesia has also agreed to accept US Federal Motor Vehicle Safety Standards and remove export restrictions on critical minerals.

The US, on the other hand, will charge 19% tariffs on Indonesian imports, a decline from the 32% duty Trump had originally threatened. The agreement thus mirrors the deal with the Philippines, with the Trump administration anticipating that the lack of trade barriers would result in $50 billion in additional market access to US goods.

In 2024, the US-Indonesia goods trade was valued at $38.3 billion, with the US incurring a trade deficit of $17.9 billion, a 5.4% increase over the previous year.

The US will also identify those products which are not naturally available or cannot be domestically produced in the US for a further tariff rate cut.