"The trade deal struck with the U.S. is certainly a relief in that it offers some certainty that U.S. tariffs on Japan-made cars won't rise to punitive levels," said Stefan Angrick, head of Japan and Frontier market economics at Moody's Analytics.

Inflation is creeping back into the US economy and might get a lot worse in the near future, thanks to President Trump's tariffs.

"We're in much better shape because it's now clear that if there's gonna be a real trade war with anyone, it would just be with China," Secretary Ross tells Fortune.

It is the most significant of a clutch of agreements Trump has bagged since unveiling sweeping global levies in April, though like other deals, exact details remained unclear.

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.

Trump said the U.S. will impose a 15% tariff on Japanese imports under the agreement, which he hailed as "maybe the largest deal in history."

President Donald Trump has announced a trade framework with Japan, placing a 15% tax on goods imported from that nation

That's down from the 25% levies he proposed earlier this month. Japan's prime minister says duties on autos from his nation will be cut to 15% from 25%.

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.

U.S. automakers worry that President Donald Trump’s agreement to tariff Japanese vehicles at 15% would put them at a competitive disadvantage, saying they will face steeper import taxes on steel, aluminum and parts than their competitors,

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.