U.S.-Japan Trade Deal Boosts Dow Jones 200 Points, EU Prepares 30% Tariffs

On the evening of July 23, the U.S. stock market opened higher, with the Dow Jones Industrial Average surging over 200 points. This rally was fueled by the announcement from the U.S. President that the United States and Japan had reached a significant trade agreement, raising market expectations for further trade deals before the August 1 deadline for tariffs. Meanwhile, the European Union is preparing to impose retaliatory measures on 100 billion euros worth of U.S. goods.

The U.S. stock market closed mixed on Tuesday, with the S&P 500 Index edging up 0.06% to close at a new record high for the second consecutive trading day. This marked the 11th time the benchmark index has set a new closing high in 2025. The Dow Jones Industrial Average rose nearly 180 points, while the tech-heavy Nasdaq Composite Index fell about 0.4% due to a decline in semiconductor stocks.

The U.S. President announced on Tuesday evening that the United States and Japan had completed a "large-scale agreement" that includes imposing a 15% "reciprocal" tariff on Japanese exports to the United States. The White House released details of the new U.S.-Japan trade agreement on Wednesday, stating that it would impose a 15% reciprocal tariff on Japanese goods exported to the United States while gradually reducing U.S. import tariffs on automobiles. Japan has committed to investing 550 billion dollars in the United States, with Washington expected to benefit significantly from this investment.

Analysts noted that while the agreement may help alleviate market concerns about tariff risks in August, other major trading partners such as the European Union, Canada, and Brazil still face uncertainty. The U.S. President also mentioned ongoing discussions with European officials to push for a trade agreement with the EU. However, reports indicate that the EU is preparing to impose retaliatory tariffs of 30% on 100 billion euros worth of U.S. goods if no agreement is reached by the August 1 deadline.

If the EU fails to reach an agreement with the United States and the U.S. President follows through on imposing 30% tariffs on most EU exports after the August 1 deadline, the EU plans to quickly impose 30% tariffs on approximately 100 billion euros worth of U.S. goods. A spokesperson for the European Commission confirmed on Wednesday that the EU would merge a previously approved list of 21 billion euros worth of U.S. goods with an additional 72 billion euros worth of goods as part of its first round of retaliatory measures. U.S. exports, including Boeing aircraft, U.S.-made cars, and bourbon whiskey, are expected to face 30% tariffs, matching the 30% rate threatened by the U.S. President.

An anonymous source familiar with the matter stated that the EU is preparing to implement these tariffs next month, provided that no agreement is reached and the United States imposes tariffs after the August deadline. The United States has been pressuring other countries to reach trade agreements by the August 1 deadline set by the U.S. President. Since April 2, the U.S. President has announced comprehensive tariff increases, causing market volatility.