Key Takeaways
- The U.S. has finalized several new trade agreements, including a "massive" deal with Japan, reciprocal tariffs with the UK, and revised tariffs with Vietnam, Indonesia, and the Philippines.
- The U.S.-Japan trade deal includes a 15% reciprocal tariff and is expected to see Japan invest $550 billion in the U.S., with Japan also increasing U.S. rice imports.
- While Japanese automaker stocks surged on reports of lower U.S. car import tariffs, Detroit’s Big Three automakers have criticized the Japan deal as "bad for U.S. Industry and Auto Workers."
- South Korea is reportedly excluding rice and beef markets from its U.S. trade talks, even as Seoul shares opened higher amid optimism from multiple U.S. trade deals.
- Oil prices are rising on hopes for more trade agreements, while gold edges lower, weighed down by the slew of new deals.
The Trump administration has announced a series of new trade agreements, significantly impacting global markets and drawing varied reactions from key industries. A "massive" trade deal has been completed with Japan, which includes a 15% reciprocal tariff and a commitment from Japan to invest $550 billion in the U.S.. This agreement also stipulates that Japan will increase its imports of U.S. rice, while upholding its "minimum access" framework for rice imports.
The news of the U.S.-Japan deal led to a surge in Japanese automaker stocks, as reports indicated a reduction in U.S. tariffs on car imports from Japan, boosting investor sentiment across Tokyo’s market. Japan’s Nikkei Index continued to climb, up 2.4%, and the deal was seen as a welcome positive surprise for investors amidst Japan's political uncertainty. However, the deal has been met with strong opposition from Detroit’s Big Three Automakers, who, through a trade group, labeled it a "bad deal for U.S. Industry and Auto Workers."
Beyond Japan, the U.S. has also secured other trade agreements. With the UK, a 10% reciprocal tariff has been established, with autos capped at 10% with quotas. Vietnam will face a 20% tariff (down from a threatened 46%), along with a 40% penalty on transshipment, yet Vietnam stocks are near record highs on reform hopes and trade deal optimism. Indonesia has agreed to a 19% tariff (down from a threatened 32%) and will drop non-tariff barriers, marking a trade victory for Trump. The Philippines will see a 19% tariff (up from 17%, but down from a threatened 20%), with the Philippine Ambassador to the U.S. describing it as a positive and evolving deal.
In other regional developments, South Korea is reportedly excluding rice and beef markets from its trade talks with the U.S., even as Seoul shares opened higher amid the broader optimism surrounding multiple U.S. trade deals. South Korea's Industry Minister stated that Seoul is closely examining the U.S.-Japan agreement. Meanwhile, China has established its Yuan mid-point at its highest level since November 6, 2024. The People's Bank of China (PBoC) fixed the USDCNY reference rate at 7.1414. The dollar opened at 1,381.1 Won, down from 1,387.8 Won. The broader impact of these trade deals is evident in commodity markets, with oil prices rising on hopes for more agreements, while gold has edged lower, weighed by the slew of new deals.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.