🥢 When Tariffs Go on a Diet — Markets Feel Lighter After U.S.–Japan Trims Trade Tensions

2 Minute Read

In a surprising turn, the U.S. and Japan have agreed to cut U.S. tariffs on Japanese auto imports from a proposed 25% to 15%, prompting global markets to stretch out and loosen their belts.

It’s rare that tariffs go on anything resembling a diet, but that’s exactly what happened—and markets responded with energy. Japan’s Nikkei index rose more than 3%, touching its highest level in a year, while Tokyo’s auto giants got a turbo boost: Toyota added around 14%, with Honda and Subaru posting double-digit gains. Meanwhile in the U.S., equities rallied as futures climbed on widespread optimism that this will be the first in a string of trade deals—and maybe a win for consumer-friendly prices.

Tariff cut calories

Instead of fattening 25% duties, the new deal carves out a leaner 15% on Japanese autos and parts. Confirming $550 billion in Japanese investment commitments—think supply chains, semiconductors, and rice fields feeding into U.S. growth.

European stocks also perked up (Euro STOXX +0.9%, FTSE +0.5%), suggesting trade appetizers are helping appetites everywhere.

This isn’t a full-blown free‑trade feast—but it’s a smart appetizer. With fewer duties, hefty investment pledges, and auto‑sector ripples, the world’s markets just felt a bit lighter.

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