Japanese automakers breathed a sigh of relief after U.S. President Donald Trump finalized a trade agreement last week. However, the relief is tempered by intensifying competition, especially from China,

President Trump's trade strategy, marked by elevated tariffs, is yielding agreements with nations like the EU, Japan, and Vietnam. The EU accepted 15% US tariffs and committed to significant purchases and investments.

Following talks in Scotland, President Donald Trump and President Ursula von der Leyen of the European Commission declared on Sunday that the United States and the European Union had reached a framework agreement on a new trade agreement.

U.S. President Donald Trump struck a trade deal with Japan that lowers tariffs on auto imports and spares Tokyo from punishing new levies on other goods in exchange for a $550 billion package of U.S.-bound investment and loans.

Japanese automakers received a temporary reprieve this week when U.S. President Donald Trump announced a cut to import tariffs on Japan-made vehicles, reducing the rate from 25% to 15%. But industry experts warn the move offers little comfort as Japanese brands face intensifying competition from China and structural economic hurdles at home.

Over the past few decades, Japan-based automaker Toyota has spent billions of dollars to expand its manufacturing and assembly plants in the United States. Those plants now employ over 64,000 people across North America and have churned out millions of vehicles.

That statement came some 12 hours after Trump announced an agreement Sunday with the European Union that would see a 15% tax paid on products brought into the United States from the bloc. The E.U. also agreed to spend $750 billion on energy purchases from the U.S., while investing an additional $600 billion here.

With the president’s new trade deals, US protectionism is slowing investment and rewiring supply chains at the expense of the global economy