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BIZ & FINANCE THURSDAY | JULY 24, 2025

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Trump strikes trade deal with Tokyo, auto stocks surge

Indonesia to ease restrictions on critical mineral exports to America WASHINGTON: The US tariff deal with Indonesia is set to ease critical mineral export restrictions from the Southeast Asian country to the United States, the White House said on Tuesday, as President Donald Trump hailed a “huge win” for companies. The deal, first announced last week, notably lowered a threatened US tariff on Indonesian products from 32% to 19%. Goods deemed to have been transshipped to avoid higher duties elsewhere, however, will be tariffed at 40%, a US official told reporters on Tuesday. “It is agreed that Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers,” Trump said on his Truth Social platform. The US leader added that“Indonesia will supply the United States with their precious Critical Minerals” and sign deals to buy Boeing aircraft and US agriculture and energy products. The country is a key producer of minerals like copper, cobalt and nickel. A joint statement separately released by the White House noted that, apart from the lower 19% tariff Indonesian goods will face, certain commodities not available in the US could also be eligible for an even lower levy. “Indonesia will remove restrictions on exports to the United States of industrial commodities, including critical minerals,” the statement added. Meanwhile, Indonesia will drop its effort to tax the flow of data, the US official said, speaking on condition of anonymity. The official called this a “revenue grab” on US companies. The country will also remove pre-shipment inspection or verification requirements on US goods imports, and has agreed to accept American federal motor vehicle safety standards. Both countries are set to finalise the deal in the coming weeks, the joint statement said. – AFP

Motors, Ford and Chrysler parent Stellantis. Autos are a huge part of US.Japan trade, but almost all of it is one-way to America from Japan, a fact that has long irked Trump. In 2024, the US imported more than US$55 billion of vehicles and automotive parts while just over US$2 billion were sold into the Japanese market from the U.S. Japanese Finance Minister Katsunobu Kato told reporters the agreement made no mention of foreign exchange rates, another issue the Trump administration had long complained about. Trump’s announcement followed a meeting with Japan’s top tariff negotiator, Ryosei Akazawa, at the White House on Tuesday. “#Mission Complete,” Akazawa wrote on X, later saying the deal did not include Japanese exports of steel and aluminum that are subject to a 50% tariff, nor any agreement on defence budgets. Japan will also drop additional safety tests currently imposed on imported US cars and trucks – requirements that Trump and other US officials have said limit the volume of American-built vehicles sold in the country. A photo of Akazawa’s meeting with Trump at the White House indicated the two sides engaged in some last minute negotiations over the investment package to seal the deal. The photo posted on X by Trump’s assistant Dan Scavino, showed the president seated across from Akazawa with a document titled ‘Japan Invest America’ and a sum of “$400B”. The figure was scored out, with “$500” hand-written above it. Japan is the largest investor in the United States. Together with pension giant GPIF and Japanese insurers, the country has about US$2 trillion invested in US markets. Besides that, Bank of Japan data shows direct Japanese investment in the United States was US$1.2 trillion at the end of 2024, and Japanese direct investment flows amounted to US$137 billion in North America last year. – Reuters

reached nearly US$230 billion in 2024, with Japan running a trade surplus of nearly US$70 billion. Japan is the fifth-largest American trading partner in goods, US Census Bureau data show. Ishiba said the US investment package includes loans and guarantees from Japanese government-affiliated institutions of up to US$550 billion to enable Japanese firms “to build resilient supply chains in key sectors like pharmaceuticals and semiconductors”. Japan will also increase purchases of agricultural products such as US rice, a Trump administration official said. Ishiba said the share of US rice imports may increase under its existing framework but that the agreement did “not sacrifice” Japanese agriculture. Bank of Japan Deputy Governor Shinichi Uchida called the deal “very big progress” and said it reduces uncertainty over the economic outlook. Some economists had forecast the tariffs could have tipped Japan – the world’s fourth largest economy – into recession. The exuberance in financial markets spread to shares of South Korean carmakers, as the Japan deal stoked optimism that South Korea could strike a comparable deal. The yen firmed slightly against the dollar, while European auto shares and US equity index futures rose. But US automakers signalled their unhappiness with the deal, raising concerns about a trade regime that cuts tariffs on auto imports from Japan while leaving tariffs on imports from their plants and suppliers in Canada and Mexico at 25%. “Any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles with high American content is a bad deal for US industry and American auto workers,” said Matt Blunt, who heads the American Automotive Policy Council which represents General “To put it plainly, it has an impact on the country, but not that much,” she told reporters. Speaking to reporters following the meeting, Marcos Jr described the tariff situation as a “living thing” that could potentially be revisited as global markets adjusted. The trade rift comes despite increasingly close defence relations between the United States and the Philippines, a former US colony and treaty-bound ally that has seen high tensions with China. Both Defence Secretary Pete Hegseth and Secretary of State Marco Rubio, in meetings with Marcos on Monday, vowed to honour the 1951 Mutual Defence Treaty with the Southeast Asian nation. The Trump administration has identified China as the top US adversary but the president has also boasted of his relationship with Chinese counterpart Xi Jinping. Speaking alongside Marcos Jr, Trump said he would “probably” visit China at Xi’s invitation “in the not-too-distant future”. He said of Marcos Jr: “I don’t mind if he gets along with China very well, because we’re getting along with China very well.”

o Duties on Japanese imports cut to 15% in exchange for US$550b investment package WASHINGTON: US President Donald Trump struck a trade deal with Japan that lowers tariffs on auto imports and spares Tokyo from punishing new levies on other goods in exchange for a US$550 billion (RM2.3 trillion) package of US-bound investment and loans. It is the most significant of a clutch of agreements Trump has bagged since unveiling sweeping global levies in April, though like other deals, exact details remained unclear. Japan’s auto sector, which accounts for more than a quarter of its US exports, will see existing tariffs cut to 15% from levies totalling 27.5% previously. Duties that were due to come into effect on other Japanese goods from Aug 1 will also be cut to 15%. The announcement sent Japan’s benchmark Nikkei stock index climbing almost 4% to its highest in a year, led by stocks in automakers with Toyota up more than 14% and Honda nearly 11%. “I just signed the largest TRADE DEAL in history with Japan,” Trump said on his Truth Social platform. “This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan.” Japanese Prime Minister Shigeru Ishiba, who plans to resign after a bruising election defeat on Sunday, according to a source close to him, hailed the tariff agreement as “the lowest rate ever applied among countries that have a trade surplus with the US”. The 68-year old leader later said that reports that he had decided to resign were “completely unfounded”. Two-way trade between the two countries Welcoming Marcos Jr to the White House, Trump called him a “very tough negotiator” and said: “We’re very close to finishing a trade deal – a big trade deal, actually.” In a social media post shortly afterward, Trump said that while the Philippines would open up completely to US goods, he would still impose a 19% tariff on products from the Southeast Asian country, a major exporter of high-tech items and apparel. “It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs,”Trump wrote on his Truth Social platform. The Philippines was among two dozen economies confronted by Trump with letters this month warning of 20% tariffs on all goods coming into the United States as of Aug 1. The 19% rate is still above the 17% threatened by Trump in April, when he threatened sweeping global tariffs. Speaking at a press briefing yesterday in Manila, Marcos Jr’s press secretary Claire Castro said the Philippine president had confirmed Trump’s zero tariffs statement but only for “certain markets”, without elaborating.

US agrees to small reduction in Philippine tariffs WASHINGTON: US President Donald Trump agreed on Tuesday to reduce threatened tariffs on the Philippines, but only by one percentage point, after what he termed a successful meeting with his counterpart Ferdinand Marcos Jr. She also downplayed the potential effects of a tariff regime, noting that just 16% of the country’s exports go to the United States, with about two-thirds being electronic components not subject to the levies.

Trump meeting with Marcos Jr at the White House. – REUTERSPIC

2022 election of Marcos Jr, before Trump returned to power. Marcos Jr’s predecessor Rodrigo Duterte had flirted with closer relations with China and bristled at American criticism over human rights under Joe Biden and Barack Obama. – AFP

Trump added the Philippines had been “maybe tilting toward China” and “we untilted it very, very quickly”. “I just don’t think that would have been good for you,”Trump said. He credited himself with the shift, although the turn towards Washington began after the