The United States and Japan reached a new trade agreement last week. While the announcement was light on details, the market-moving information included a 15% tariff rate on Japanese imports into the U.S. Japanese car manufacturers rallied swiftly on the news, as the 15% rate is far less punitive than the 27.5% rate that was scheduled to take effect on August 1.
A 15% tax is still the highest that companies importing from Japan have paid in many decades, but markets have seemingly priced out the worst-case scenario. One area of the market that didn’t rally? The stocks of U.S. automakers, whose leaders haven’t exactly praised the new agreement.
