President Donald Trump announced a new trade agreement with Japan on Tuesday, claiming it is the "largest trade deal in history". The deal includes a Japanese commitment to invest $550 billion in the US. Japanese goods entering the US will be subject to a 15% tariff, lower than the 25% Trump had previously threatened. Trump stated the agreement opens Japan's economy to increased US goods, including cars, trucks, rice, and agricultural products. Japanese Prime Minister Shigeru Ishiba confirmed the agreement, highlighting the 15% tariff as the lowest among countries with trade surpluses with the US. He also noted that the agreement doesn't include Japanese tariff reductions, and that Japan was the first to reduce tariffs on cars and auto parts without quantity restrictions.

The deal follows Trump's August threat of a 25% tariff on Japanese exports if an agreement wasn't reached. Oxford Economics' Shigeto Nagai described Japan's 15% tariff as its "best compromise," and noted the planned Japanese investment would boost US manufacturing. The Nikkei 225 index rose over 3% following the announcement. The agreement comes as Prime Minister Ishiba faces pressure to resign after his party's electoral losses.

Impact Statement: The agreement may significantly impact US-Japan trade relations and potentially influence global trade dynamics. The deal's long-term economic effects remain to be seen.