Annual U.S.-Japan Tariff and Framework Agreement Insights Report

Key Chapter Title List

1. Overview of U.S.-Japan Tariffs and the 2025 U.S.-Japan Framework Agreement
2. Key U.S. Tariff Actions
3. Main Contents of the U.S.-Japan Framework Agreement
4. Specific Tariff Arrangements in the Agreement
5. Japan's Procurement and Investment Commitments
6. Key Issues Facing Congress
7. Author Information and Disclaimer

Document Introduction

This report is based on a research brief (IN12608) released by the Congressional Research Service (CRS) on September 17, 2025. It aims to provide a professional and objective assessment of the recent U.S. tariff policies on Japan and the subsequently reached bilateral Strategic Trade and Investment Framework Agreement. The core context is President Trump's invocation of the International Emergency Economic Powers Act (IEEPA) of 1977 in April 2025, citing a national emergency caused by "large and persistent merchandise trade deficits" to impose a 10% "reciprocal tariff" on most trading partners, including Japan. Subsequently, for partners with the largest merchandise trade deficits with the U.S. (Japan's deficit reached $69 billion in 2024), the U.S. announced and scheduled higher country-specific tariffs. Ultimately, in negotiations with Japan, the initially proposed 25% tariff was reduced to 15% and announced alongside the framework agreement on July 22, 2025.

The report details the key contents of the agreement and the related U.S. tariff implementation mechanisms. According to Executive Order 14345 and related regulations issued in September 2025, the 15% tariff on Japanese imports is retroactively effective from August 7, 2025, and is calculated in combination with, not on top of, the Most-Favored-Nation (MFN) rate. The agreement provides exemptions or preferential treatment for certain Japanese products. For example, Japanese products covered by the World Trade Organization Agreement on Trade in Civil Aircraft (excluding unmanned aerial vehicles) are exempt from the 15% IEEPA tariff and Section 232 tariffs on steel, aluminum, and copper products. Furthermore, the report also discloses significant commitments made by Japan, including annual purchases of $8 billion worth of U.S. agricultural products, $7 billion worth of U.S. energy products, and a total of up to $550 billion in investments in strategic sectors in the United States. Target industries cover semiconductors, pharmaceuticals, critical minerals, artificial intelligence, and quantum computing, among others, to be completed by January 2029.

The report delves into the complex impact of this agreement on the congressional agenda and U.S.-Japan relations. Congress is internally debating how to exercise its constitutional powers over foreign trade and tariffs, considering legislation (such as S. 348) to modify authorizations and strengthen oversight of tariff actions and trade negotiations. Some members of Congress welcome the agreement, believing it will increase U.S. jobs and exports; others criticize it, arguing it could harm U.S. auto workers and expressing concern that the 15% tariff will still impose significant economic costs, potentially complicate the U.S.-Japan alliance, and weaken cooperation on shared priorities such as supply chain resilience. The report also notes that the outcome of legal challenges surrounding the use of IEEPA authority to impose tariffs may affect the negotiation and implementation of such framework agreements.

This analysis strictly adheres to the original CRS report text, does not introduce external viewpoints or speculation, and aims to provide defense and international relations researchers, policy analysts, think tank scholars, and geopolitical observers with an authoritative, in-depth interpretation of key developments in U.S.-Japan economic and trade relations in 2025, focusing on policy motivations, the legal and implementation framework of the agreement's provisions, and their potential strategic and political implications.