Bloomberg Talks US Commerce Secretary Lutnick on details of US-Japan trade deal
Jul 23, 2025
Howard Lutnick, the US Commerce Secretary, shares insights on a recent trade deal with Japan that could serve as a model for future agreements with the EU. He discusses Japan's extensive $550 billion fund to boost American manufacturing, especially in pharmaceuticals and semiconductors. Lutnick highlights the tough stance on tariffs, noting that larger countries may struggle to achieve a lower rate than Japan's 15%. The conversation also touches on the implications for American exporters and the evolving dynamics of US-China trade relations.
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Japan's Innovative Financing Model
- Japan finances projects in the U.S. that align with national security priorities, then splits profits mainly with U.S. taxpayers.
- This novel investment approach helps reduce tariffs while boosting U.S. manufacturing of critical goods.
Japan's Auto Tariff Compromise
- Japan secured a 15% tariff on autos by committing to invest heavily in American manufacturing.
- This rate is a strategic compromise allowing Japanese producers to keep some manufacturing domestic while expanding U.S. production.
Auto Tariff Floor for Large Countries
- Larger countries face difficulties getting auto tariffs below 15%, which Japan accepted.
- Smaller countries might negotiate lower rates, but 15% is effectively a floor for bigger economies.