The new U.S.-Japan trade deal lowers tariffs and strengthens economic ties, helping challenge China's regional aggression and instability.

Japan last week struck a trade deal with the U.S. that lowers tariffs on cars and other goods to 15% in exchange for a U.S.-bound $550 billion Japanese investment package.

Recent pacts with Britain, Europe and Japan mean that autos exported from those countries and regions face lower U.S. tariffs than Canadian vehicles do.

President Donald Trump announced a trade agreement with Japan on Tuesday, making it the largest U.S. trade partner to broker an accord as the White House threatens to impose tariffs on dozens of countries within days.

The dollar hit a one-month high versus the euro on Tuesday in the wake of a string of trade agreements between the United States and its major trade partners, while markets await interest rate decisions from the Federal Reserve and the Bank of Japan.

TACO or tariffs? An August 1 deadline looms after the European Union became the latest of the top US trading partners to reach a deal with Trump.

The US and EU are racing to lock in the final details of their major new trade deal before Friday's deadline. Critics say its a rushed fix, with German Chancellor Friedrich Merz calling the outcome unsatisfying and France’s Bayrou dubbing the EU’s "submission" a "dark day.

Japan is playing down the risks from its deal after the White House said the U.S. would direct $550 billion in investments by Japan and keep 90% of the profit.