The White House sent a firm letter to Japan’s Prime Minister on July 7, 2025, citing deep concerns over the long-standing trade imbalance, and will impose a 25% tariff on all goods imported into the US.

The U.S. values its trading relationship with Japan but is concerned about the significant trade deficit.
The U.S. has decided to move forward with Japan on the basis of more balanced and fair trade.
Starting August 1, 2025, the U.S. will impose a 25% tariff on all Japanese products entering the U.S., separate from existing sectoral tariffs.
Products routed through third countries to avoid tariffs will still be subject to the higher tariff.
The 25% tariff is described as modest compared to the trade imbalance the U.S. seeks to correct.
No tariffs will apply to Japanese companies that manufacture within the United States.
The U.S. will support fast-track approvals for such domestic investments.
If Japan increases its tariffs in response, additional U.S. tariffs will be applied on top of the 25%.
The letter accuses Japan of many years of non-reciprocal tariff and non-tariff barriers, contributing to an unsustainable trade deficit.
The U.S. views this deficit as a threat to the economy and national security.
The U.S. expresses willingness to adjust tariffs (up or down) based on Japan’s openness to U.S. markets.
Ends with an invitation to work as long-term trade partners, but emphasizes that Japan must act to eliminate barriers for any adjustments to be made.

The price of major indices has moved lower with the S&P now down -0.89%. The Nasdaq has moved lower as well with the price low reaching 6215.25. The price is now at 6228 or -0.81%. A similar letter was sent to So. Korea.

Below is the letter to Japan.

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