WASHINGTON D.C./TOKYO: U.S. President Donald Trump has signed an executive order lowering tariffs on Japanese automobile imports and other goods, formalizing a July trade agreement that had hung in limbo for weeks.

The move clarifies Japan's robust auto sector and comes with a sweeping US$550 billion Japanese investment pledge in U.S. projects.

The order, announced on September 4, reduces auto tariffs to 15 percent from 27.5 percent, taking effect seven days after publication. It also confirmed that tariffs would not be stacked on goods such as beef that already faced higher duties, with rates retroactively adjusted to 15 percent from August 7. Commercial airplanes and parts were excluded entirely.

This step offers relief to Japanese carmakers who have been among the hardest hit by Trump's aggressive tariff regime. Toyota estimated last month that its losses from U.S. auto tariffs could reach nearly $10 billion.

"Finally," Japan's chief trade negotiator Ryosei Akazawa wrote on X, noting it had taken 10 trips to Washington to close the deal. Speaking later to reporters, he called the order "a steady implementation of the agreement reached on July 22."

South Korea, which negotiated a similar 15 percent tariff framework in July, is still waiting for its own executive order. A Seoul trade official said Friday the country was studying the potential impact of Washington's move on Japan. Shares of Japanese automakers ticked higher on Friday, while Korean rivals edged lower.

Toyota welcomed the clarity, saying that while nearly 80 percent of the cars it sells in the U.S. are already made in North America, "this framework provides much-needed certainty."

The agreement also carries commitments from Tokyo to increase purchases of U.S. agricultural products, including corn, soybeans, and bioethanol, worth about $8 billion annually, and to boost defense spending with U.S. contractors to $17 billion a year, up from $14 billion. In addition, Japan will buy 100 Boeing planes, the White House said.

Trump's order reiterated the Japanese government's pledge of $550 billion in investments across equity, loans, and guarantees directed by Washington. A memorandum of understanding on those funds was also signed on September 4. Two-way trade between the nations reached $230 billion in 2024, with Japan running a $70 billion surplus.

The deal comes at a sensitive time for Prime Minister Shigeru Ishiba, who faces a possible leadership challenge after his ruling coalition lost its parliamentary majority amid voter anger over high living costs and tariff uncertainty. While Ishiba can point to the trade pact as a success, political analysts see a strong chance he could still be forced out.

Although Japan has said the agreement guarantees it the lowest U.S. tariff rate on chips and pharmaceuticals, the latest order omitted that provision. Akazawa told reporters Tokyo would continue pressing Washington to uphold that commitment.