Overview of Japan-US Agreement Documents The Japanese and US governments reached an agreement in July on US tariff measures discussions, after which President Trump issued an executive order on September 4 to reduce tariffs on Japan. Additionally, on the same day, they created a joint statement regarding Japan's increased purchases of US products and tariff policy direction, as well as a memorandum of understanding (MOU) on target sectors and selection methods for Japanese investment in the US.
CSIS Expert Analysis Kristi Govella, Director of the Japan Program at the Center for Strategic and International Studies (CSIS), published an analysis on September 10 explaining the key points of the three documents.
Key points of the executive order include clarification that there is no "stacking" of mutual tariffs and general tariffs, and explicit reduction of tariffs on Japanese automobiles and auto parts.
Key points of the joint statement include clarification of amounts and sectors for Japan's purchases of US products, and a policy to keep future tariffs on Japanese pharmaceuticals and semiconductors at or below the same level as other countries.
Key points of the MOU include clarification of investment deadlines and sectors, and clear investment target selection processes through the US "Investment Committee" and bilateral "Consultation Committee." Cash flow distribution ratios are set at 50% US/50% Japan until reaching the "deemed distribution amount," then 90% US/10% Japan thereafter.
Assessment and Challenges In positive evaluation, Govella positively assessed the clarification of agreement content, pointing out that relatively lower US tariff rates on Japan compared to other countries would enhance the competitiveness of Japanese products.
Regarding potential risks, she pointed out that the executive order and MOU contain provisions allowing the US to raise tariffs if Japan fails to fulfill the agreement, and the possibility of the US government introducing tariff measures not mentioned in the three documents, stating "potential pitfalls remain."
Hudson Institute Investment Analysis William Chou, Deputy Director of the Japan Program at Hudson Institute, published a report on September 5. He identified LNG development projects in Alaska as promising candidates for investment projects, positively evaluating them as "contributing to promoting Japanese corporate investment in the US" and "further solidifying the deep and multilayered partnership between the US and Japan."