Implementing the United States–Japan framework agreement

As stated by the Trump Administration, the strategic goal of the Agreement is to reduce the U.S. goods trade deficit with Japan, bolster the U.S. manufacturing and defense industrial base, and mitigate national security risks identified in past Section 232 actions on aluminum, steel, autos and auto parts, and copper.

Announced initially on July 22, 2025, the agreement sets reciprocal commitments on tariffs, market access, and investment. The Federal Register Notice (FRN) was published on September 9, 2025.

A baseline tariff of 15% will apply to nearly all Japanese imports unless their existing Harmonized Tariff Schedule of the United States (HTSUS) Column 1 rate is already 15% or higher. This approach is similar to what we have seen with the U.S.-EU Framework Agreement, where the additional ad valorem rate will be determined by a product’s current ad valorem (or ad valorem equivalent) rate of duty under column 1 of the Harmonized Tariff Schedule of the United States (HTSUS) (‘‘Column 1 Duty Rate’’).

These new tariff rates are retroactive to products of Japan entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern daylight time on August 7, 2025. Any refunds shall be processed pursuant to applicable laws and CBP’s standard procedures for such refunds (e.g., post summary corrections (PSC) and protests).

It should be noted that CBP immediately issued CSMS Message 66146676 advising importers to

not

file PSCs or protests until CBP issues further guidance and instructions.

The Agreement states that Japan, will provide American manufacturing, aerospace, agriculture, food, energy, automobile, and industrial goods producers with breakthrough openings in market access across key sectors. Key sectors called out in the Agreement include:

Commerce (with the ITC and CBP) will issue Federal Register notices to modify the HTSUS for aerospace and auto measures within seven days of publication of EO 14345.

Homeland Security (in consultation with the ITC) may determine and notice any additional HTSUS changes needed to effectuate the order.

Commerce may issue rules defining what qualifies as “products of Japan,” set procedures for the exemptions (e.g., for generics and unavailable natural resources), and otherwise operationalize the tariff framework.

Commerce will monitor Japan’s implementation of its commitments and report to the President.

If Japan fails to implement commitments, the President may modify the order to address the declared emergency and section 232 national security concerns.

Commerce and Homeland Security are directed and authorized to take necessary actions (including temporary regulatory suspensions or amendments) to implement the order and may redelegate within their departments.

Any prior proclamations or executive orders inconsistent with EO 14345 are superseded to the extent of inconsistency.

In relationship to earlier actions, the order explicitly references and, in certain sectors, replaces or suspends effects of earlier measures including EO 14257 and Proclamations 9704 (aluminum), 9705 (steel), 9888 (autos/parts), and 10962 (copper), particularly for products of Japan covered under the new framework.

Predictability and simplicity: The 15% floor aims to standardize treatment across most Japanese imports while maintaining existing higher duty rates where they already exist.

Sectoral targeting: Carve-outs and tailored treatment—especially for civil aircraft and generic pharmaceuticals—seek to avoid supply chain disruptions in critical or globally integrated sectors.

Potential cost increases on a broad range of Japanese imports at or below the 15% threshold could raise input costs for U.S. downstream industries. However, removal or easing of additional duties on civil aircraft and targeted exemptions for generics and unavailable resources could temper price and supply pressures in those markets.

The $550 billion investment pledge is unprecedented in scale for Japan. If realized, and if directed toward manufacturing, energy, and critical technologies, it could meaningfully expand U.S. capacity and employment. The selection mechanism by the U.S. government signals an attempt to align foreign capital with domestic industrial strategy and national security goals.

U.S. agriculture stands to gain from expanded market access and committed Japanese purchases, potentially stabilizing farm incomes.

The autos provision offers relief from prior section 232 increments by moving to the 15% floor structure, while Japan’s acceptance of U.S.-certified vehicles could lower non-tariff barriers for American automakers in Japan.

The administration positions the Agreement as a tool to narrow the U.S. trade deficit with Japan and to address section 232 security concerns. The success of this approach will hinge on Japan’s follow-through on purchases and investment, as well as the responsiveness of U.S. production and exports.

This executive order is both a trade and industrial policy instrument. It combines a broad tariff baseline with targeted carve-outs, links market access to national security objectives, and pairs tariff changes with large-scale investment and procurement commitments. Its ultimate impact will depend on the speed of implementing regulations, Japan’s delivery on its pledges, and how effectively U.S.-directed investments are deployed into strategic sectors.

For more information on how ONESOURCE Global Trade solutions can assist you in managing supply chain risk and regulatory compliance, contact your Account Manager or Client Success Manager.