On September 4, President Trump issued an executive order to implement a trade agreement recently reached between the United States and Japan. The executive order memorializes a trade agreement announced by President Trump in July and provides some additional details on the terms of the agreement.
The agreement introduces a general tariff framework where a baseline 15% tariff will apply to nearly all Japanese imports. If a product’s existing tariff is less than 15%, it will be increased to 15%, while no additional tariff will be applied to goods with a most favored nation (MFN) rate of 15% or more. This new framework replaces previous tariffs imposed under Executive Order 14257, the so-called “Liberation Day” tariffs.
The tariffs will apply retroactively to Japanese goods imported on or after August 7, 2025. Importers who have already paid duties in excess of the applicable rates will be able to apply for a refund. US Customs and Border Protection (CBP) issued guidance on September 5, instructing the trade community not to file a Post Summary Correction or protest until CBP issues instructions on how those requests for refunds should be submitted. CBP will provide additional guidance to the trade community. Stay tuned for future guidance on how to request a refund.
The agreement also includes sector-specific tariff adjustments. For automobiles and parts, the same 15% rate applies, superseding existing Section 232 tariffs. Tariffs on aerospace products are removed for civil aircraft, excluding unmanned aircraft, under WTO rules. Additionally, the Secretary of Commerce may eliminate tariffs for natural resources not available in the US in sufficient quantities to satisfy domestic demand and for generic pharmaceuticals. These adjustments aim to support key industries and ensure the availability of essential goods.
Within seven days of the executive order, the Secretary of Commerce will publish a notice in the Federal Register with modifications to the harmonized tariff schedule reflecting the agreement. The Secretary of Commerce will monitor Japan’s compliance with the agreement, and tariffs may be adjusted if Japan fails to meet its commitments (including, among others, greater market access to the Japan market across key sectors, $ 550 billion investment in the United States, etc).
