News / Tough talk as new trade and tariff deals are agreed round the world

© Tom Wang |

Americans will have to fork out an additional 15% on Japanese goods, including cars, and 19% extra for Indonesian and Filipino goods, following trade agreements with the countries. 

Although Japan’s deal has not yet appeared on the White House official list, Japan confirmed an agreement was made. 

The big sticking point, the automotive sector, saw Japan negotiate that tariff down from 25% to 15%. The second-largest exporter to the US sold it some 1.3m cars in 2024.

Japan also said it would invest $550bn in the US, according to President Trump on social media, and the pair would form a joint-venture for LNG exploration in Alaska. 

Japan will also open up its markets to US cars and trucks, rice, and other agricultural products, and, said Mr Trump, to “other things”, suggesting that there were some details still to be thrashed out. 

However, it is expected that Japanese consumer interest in US automobiles will be limited, as they prefer smaller, more fuel-efficient cars. 

Steel tariffs, however, will remain at 50%. 

The Indonesian deal with the US has been more formally fleshed out, but there remain some negotiations, specifically on rules of origin. Indonesia has promised to eradicate 99% of its tariffs on the US, while 19% tariffs apply on Indonesian goods – but there may be discounts for products otherwise unavailable on the US. 

Indonesia has also agreed to accept US standards for imports on vehicle safety and emissions, pharmaceuticals, cosmetics, and medical devices. A big sticking point with countries in Europe in particular, Indonesia has also agreed to recognise US regulatory oversight on US meat, poultry, and dairy imports. 

The Jakarta Globe said last week: “Indonesian authorities are working to ensure that key national export commodities – including crude palm oil, nickel, coffee, and cocoa – can enter the US market without high tariffs. These products, which are not produced in the US, remain a central focus in ongoing negotiations with Indonesia.” 

The newspaper also pointed to Indonesia’s recently finalised trade deal with the EU, which has 0% tariffs on nearly all Indonesian exports to Europe, suggesting trade with the EU will likely grow faster than with the US, although the June agreement has yet to be ratified. 

The Philippines is also said to have reached a tariff rate of 19% with the US. 

Meanwhile, the EU and Japan also today agreed a “Competitiveness Alliance”, with one of the three pillars being trade. EU president Ursula von de Leyen said: “The trade flows between our economies have increased by over 20%. But this was just the beginning.

“Now we must fully implement the agreement in all areas such as government procurement and sanitary and phytosanitary standards and others so we can unlock the full potential. We have also agreed to simplify rules where possible, to make life easier for our businesses. And to further promote mutual investment opportunities.” 

And today the UK and india are set to sign a trade deal, with 99% of Indian exports to the UK, including gems, textiles, engineering goods, leather, garments, and processed foods, facing no tariffs. In return, the UK will see phased tariff cuts on 90% of its exports to India. Duties on whisky will fall from 150% to 75% immediately, and to 40% over 10 years. 

While Toyota’s shares rose 14% on the news of the US trade deal with Japan, and Honda was up 11%, not all carmakers are celebrating. US automaker General Motors said tariffs on imported cars had made a $1.1bn impact on its bottom line, as net income fell 35% in Q2. It added that Q3 would be worse. 

Market amalyst Bernstein reportedly said GM’s international business had better-than-expected results, which had been helped by currency fluctuations. 

GM has tried to keep its prices flat, and has also moved some production back to the US, while hoping for beneficial trade deals with Mexico, Canada and South Korea. But the auto giant said few of its tariff mitigation efforts had been fully implemented. 

“We’ve got a longer-term plan to be able to mitigate a substantial part of this,” CFO Paul Jacobson told investors.