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Home World News Asia

U.S. backtracks on Japan tariff calculation, taking effective rate lower

August 8, 2025
in Asia
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U.S. backtracks on Japan tariff calculation, taking effective rate lower
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The United States will revise its July 31 executive order, which did not include a “reciprocal” tariff rate ceiling for Japan, Ryosei Akazawa, Japan’s chief negotiator, said Thursday.

The revision will take place when the U.S. officially cuts the Trump tariff on Japanese cars in half — total tariff for automobiles will become 15% — another key element in the trade agreement reached by the two countries just weeks ago.

Extra tariffs already collected after the new rate took effect on Thursday — which Akazawa said was due to a U.S. clerical error — will be refunded.

The 15% reciprocal tariff on Japanese goods was initially to be charged in addition to existing duties, contrary to Japan’s interpretation of the July 22 agreement.

Japan insisted it had secured a U.S. commitment that, for items with an existing tariff rate below 15%, the total duty including the reciprocal tariff would be capped at 15%. For items with an existing tariff above 15%, no additional tariff would be imposed, Japan said.

That language was absent from the executive order signed by the U.S. president on July 31, which shows only the European Union enjoying this more favorable calculation.

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