Landmark U.S.–Japan Trade Deal Fuels Global Market Rally
By Okafor Joseph
Washington/Tokyo, July 24, 2025 — A sweeping U.S.-Japan trade and investment deal, announced on July 23, has sent global markets into a bullish frenzy. President Donald Trump confirmed that tariffs on Japanese auto imports will be slashed from 27.5% to 15%, while tariff threats on other goods have been scaled back from 25% to 15% ReutersThe AustralianThe Wall Street Journal.
In exchange, Japan has pledged a colossal $550 billion in investment and loan guarantees targeting American industries—from semiconductors to energy infrastructure New York Post+8Reuters+8The White House+8. The deal also includes expanded U.S. agricultural exports and a 100-plane Boeing purchase, alongside boosted defense ties worth $17 billion annually Reuters+1The White House+1.
Market reaction was swift:
- The Nikkei soared nearly 4%, touching a one-year high Navbharat Times+15Reuters+15Reuters+15.
- In the U.S., the Dow gained ~1.14%, the S&P 500 climbed ~0.78%, and the Nasdaq rose ~0.6% Reuters+2Reuters+2AP News+2.
- Asian markets also surged: Topix hit a record close, while Seoul, Shanghai, and Mumbai indices rose on optimism about global trade expansion ReutersAP News.
Yet the deal isn’t without detractors. American automakers—General Motors, Ford, Stellantis—warn that reduced tariffs on Japanese cars could disadvantage their Mexico- and Canada-built models Reuters+8Reuters+8Reuters+8. Ford CEO Jim Farley warned, “This is a bonanza for our import competitors” Reuters. Additionally, structural concerns remain: long-term U.S. consumer prices might rise, and there’s debate over whether this framework positions the U.S. advantageously The Wall Street JournalThe Australian.
