Has Trump’s Tariff Toughness Given Way to Pragmatism?

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What looks like a climbdown on tariffs may be a calculated deal: deep Japanese investment, potential South Korea parity, and mixed signals from Washington.

By TRH Global Affairs Desk

NEW DELHI, September 5, 2025 — US President Donald Trump signed an executive order cutting tariffs on Japanese autos from roughly 25–27.5% to 15%, implementing a broader trade framework that includes a colossal $550 billion investment pledge from Japan in US infrastructure, agriculture, and defence-related sectors.

At first blush, such a reduction may appear as a retreat—or at least a deviation—from Trump’s once-ironclad “America First” tariff posture. Yet this maneuver seems far from defeat; rather, it’s a hard-bargained exchange: lower tariffs for vast capital inflow, expanded US export markets, and softened trade tensions.

In response to the order, Ryosei Akazawa, Japan’s lead trade negotiator, simply posted “Finally” on X, showing long-sought clarity for embattled auto exporters. Toyota chimed in with cautious gratitude, highlighting the framework’s much-needed market certainty while underscoring that the majority of its US sales already stem from North American production.

Importantly, South Korea is watching keenly. Under its own July deal, it secured the same 15% tariff in exchange for a $350 billion investment fund and $100 billion in energy purchases. With Japanese tariffs now officially lowered, South Korean automakers like Hyundai and Kia now face a sharper competitive disadvantage—stranded between cheaper Japanese imports and regained access promised by US policy, said Reuters in a report.

“Great news on Japan! It also got what the EU got, which is 15% max tariff, including on key sectoral ones. That is a big deal because tariffs are NOT STACKED. As in, this puts the MAX of 15% & also plenty of exemptions. That means South Korea will get this,” wrote Trinh, a Vietnamese economist, on X.

She also speculated if the Southeast Asians can also get similar deals.

Is this a climbdown by Trump? Yes—by the letter, tariffs have eased. But strategically, it’s better viewed as a recalibration: using tariff relief to unlock commitments, infrastructure dollars, and diplomatic goodwill. It’s less about caving and more about redeploying negotiating leverage to extract other concessions.

The Japan Times termed Japan’s investment commitment in the US as “unlike any other agreement in American history.” Asahi Shimbun framed the deal as the resolution of months-long trade friction, affirming the US move brings much-needed certainty for Japan’s auto industry, while the investment package offers long-term economic impact.

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