Nearshore News: U.S.-Japan Trade Deal, EU Prepares Retaliation and August 1 Deadline Nears

With just days until August 1 tariff deadline, global trade policy is moving at breakneck speed. A sweeping new deal with Japan, escalating tensions with the EU, and billion-dollar hits to major U.S. manufacturers like GM all reflect the growing consequences of the trade strategy. While some countries are cutting last-minute deals, others are preparing retaliation. Today’s developments offer a snapshot of the shifting global order—and what’s at stake for businesses, consumers, and policymakers.

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Nearshore News Summary:

• President Trump announced a trade deal with Japan that imposes 15% reciprocal tariffs on Japanese exports, including cars and auto parts, while securing a $550 billion Japanese investment in the U.S. (CNN)
• Tariffs of 25% to 50% are scheduled to hit major trading partners like Canada, Mexico and the EU unless deals are struck before August 1. (ABC News)
• The EU is preparing nearly $117 billion in retaliatory tariffs on U.S. goods if no trade deal is reached by August 1. The countermeasures would go into effect August 7. The EU may also invoke an anti-coercion tool that could expand retaliation beyond tariffs, affecting U.S. services and tech firms. (The Guardian)
• General Motors reported a 34% drop in second-quarter profit after incurring over $1 billion in costs from tariffs. (NYT)

Trump announces ‘massive’ trade agreement with Japan

Published: July 23, 2025
Source: CNN

President Trump announced a wide-ranging trade deal with Japan that imposes 15% reciprocal tariffs on Japanese exports, including cars and auto parts, while securing a $550 billion Japanese investment in the U.S. The agreement, which avoids previously threatened 25% tariffs, opens Japan’s markets to more U.S. goods such as rice and agricultural products. 

Key points:

• 15% Tariffs Instead of 25%: The U.S. will impose a 15% tariff on Japanese goods, including automobiles, avoiding the harsher 25% rate applied to other countries since April.
• $550 Billion Japanese Investment: Japan will invest $550 billion into the U.S., including equity and loans in sectors like semiconductors and pharmaceuticals.
• Agricultural Access for the U.S.: Japan agreed to expand access for U.S. rice and agricultural products while emphasizing no harm to its domestic farming sector.
• Markets React Positively: The announcement drove Japanese markets to a one-year high, with auto shares surging and officials in Tokyo calling the deal a “win-win.”
• Strategic and Economic Implications: The deal relieves Japan from higher tariff threats and may reposition it geopolitically, especially as it balances trade ties with both the U.S. and China.

What to know about Trump's Aug. 1 tariff deadline

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Published: July 21, 2025
Source: ABC News

President Trump is preparing to impose tariffs of up to 50% on dozens of countries starting August 1, unless trade agreements are reached. These levies would dramatically escalate U.S. trade policy and impact prices for common goods. 

Key points:

• Aug. 1 Tariff Deadline Set: Tariffs of 25% to 50% are scheduled to hit major trading partners like Canada, Mexico and the EU unless deals are struck before August 1.
• Household Impact Estimated at $2,400: Analysts expect the tariffs to raise costs on everyday items like shoes, coffee, and appliances, costing the average U.S. household an extra $2,400 annually.
• Delays Possible, But Unlikely: While Trump has delayed tariffs before, officials now call August 1 a “hard deadline,” though negotiations may still continue afterward.
• Some Tariffs Already in Effect: A 10% baseline tariff covers most imports, with additional levies on steel, aluminum, and autos still in place. Legal challenges remain unresolved.
• Recent Deals and Pullbacks: Trade agreements with the UK, Vietnam, Indonesia, and China have reduced some tariffs, but the broader strategy continues to pressure countries into U.S.-favored terms.

EU prepares €100bn no-deal plan to match Trump’s threat of 30% tariffs

Published: July 23, 2025
Source: The Guardian

The EU is preparing nearly €100 billion (around $117 billion) in retaliatory tariffs on U.S. goods if no trade deal is reached with President Trump by August 1. The countermeasures, targeting products from aircraft to whiskey, would go into effect August 7 if approved by EU member states. The move responds to Trump’s threat of 30% tariffs on EU exports and reflects mounting frustration in Brussels, especially from Germany and France. 

Key points:

• Billions in Tariffs Prepared: The EU plans to merge two tariff lists into one, potentially targeting U.S. imports like whiskey, cars, poultry, and Boeing aircraft, with measures set to activate on August 7.
• Response to Trump’s 30% Threat: The plan counters Trump’s warning of blanket 30% tariffs on EU goods starting August 1 if no trade deal is reached.
• Germany and France Back Tougher Stance: Berlin and Paris are now supporting use of the EU’s anti-coercion instrument (ACI), a “nuclear option” allowing broader economic retaliation, including bans on U.S. services.
• Auto Industry Already Feeling the Pain: Companies like Stellantis and Volvo report major losses linked to existing U.S. tariffs.
• Diplomatic Efforts and China Context: EU leaders are pushing for high-level talks with Trump, while also engaging with China in parallel as trade tensions intensify and China’s surplus continues to grow.

G.M. Profit Shrinks on Billion-Dollar Tariff Hit

Published: July 22, 2025
Source: NYT

General Motors reported a 34% drop in second-quarter profit after incurring over $1 billion in costs from tariffs. The automaker, now expecting up to $5 billion in annual tariff-related expenses, is cutting costs and shifting production to the U.S. to mitigate the impact. Despite EV gains, GM is also investing in traditional gasoline engines, reflecting a mixed strategy under current trade and regulatory conditions.

Key points:

• $1 Billion Tariff Hit in Q2: Trump’s tariffs led to a $1 billion cost for GM in the second quarter, with full-year impacts projected to reach $5 billion.
• Profit Down Over One-Third: GM’s quarterly profit fell to $1.9 billion from $2.9 billion last year; sales dropped 2% to $47 billion.
• Shift to U.S. Production: GM is investing $4 billion to boost domestic production of trucks and SUVs to avoid future tariffs.
• EV Sales Up, But ICE Investment Continues: EV sales doubled, but GM is also investing $900 million in a new gas engine factory, citing weaker-than-expected EV market growth.
• Growth in China Market: GM’s China sales rose to $6.1 billion, aided by electric and hybrid offerings through its SAIC partnership.