WASHINGTON: US President Donald Trump announced on Tuesday a "massive" trade deal with Japan, cutting a threatened 25% tariff to 15% ahead of an August 1 deadline.

Trump has vowed to hit dozens of countries with punitive tariffs if they don't strike a deal with the United States by next month.

So far, Trump has only announced pacts with Japan, Britain, Vietnam, the Philippines and Indonesia, while talks continue with other trade partners.

"We just completed a massive deal with Japan, perhaps the largest Deal ever made," Trump said on his Truth Social platform.

Trump said that under the deal, "Japan will invest, at my direction, $550 billion into the US, which will receive 90% of the profits".

He did not provide further details on the unusual investment plan, but said the deal "will create Hundreds of Thousands of Jobs."

Japanese imports into the United States were already subject to a 10% tariff, which would have risen to 25%on August 1 without a deal.

Duties of 25% on Japanese autos — an industry accounting for 8% of Japanese jobs — were also already in place, as well as 50% on steel and aluminium.

Japanese Prime Minister Shigeru Ishiba said on Wednesday in Tokyo that the autos levy was cut to 15%.

"We are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume," he told reporters.

"We think it is a great achievement that we were able to get the largest cut (in tariffs) among countries which have trade surpluses with the US," he said.

This sent Japanese auto stocks soaring on Wednesday, including Toyota, which rocketed more than 12%.

US-bound shipments of Japanese cars tumbled 26.7% in June, stoking fears that Japan could fall into a technical recession.

Last year vehicles accounted for around 28% of Japan's 21.3 trillion yen ($142 billion) of exports to the world´s biggest economy.

To Trump's annoyance, US-made cars sell poorly in Japan, with only hundreds sold annually for the likes of General Motors, compared to millions of Toyotas bought by US motorists.

The US president also wanted Japan to increase imports of rice, the price of which has soared in recent months in the Asian giant, and of US oil and gas.

Rice imports

But Trump said Tuesday that Japan has agreed to "open their Country to Trade, including Cars and Trucks, Rice and certain other Agricultural Products, and other things."

Rice imports are a sensitive issue in Japan, and Ishiba's government — which lost its upper house majority in elections on Sunday— had previously ruled out any concessions.

Ishiba, whose future is uncertain following the election, said on Wednesday that the deal does not sacrifice Japan´s agricultural sector.

Trump has been under pressure to wrap up trade pacts after promising a flurry of deals ahead of his August 1 tariff deadline.

Earlier on Tuesday, he announced a deal had been reached with the Philippines which would see the country face 19% tariffs on its exports.

The White House also laid out details of a deal with Indonesia, which would see it ease critical mineral export restrictions and also face a 19% tariff, down from a threatened 32%.

Indonesian goods deemed to have been transshipped to avoid higher duties elsewhere, however, will be tariffed at 40%, a US official told reporters Tuesday.

After an escalatory tit-for-tat with China, the two major economies agreed to a temporary lowering of tariffs, with another round of negotiations expected next week in Stockholm.

Since returning to the White House in January, Trump has imposed a sweeping 10% tariff on allies and competitors alike, alongside steeper levels on steel, aluminium and autos.

Legal challenges to Trump´s non-sectoral tariffs are ongoing.