T he U.S. and Japan have reached a trade agreement under which the longtime U.S. will face a 15% tariff—down from a previously threatened 25%—President Donald Trump announced on Tuesday, as Japan’s Prime Minister hailed the move as a “new golden era” in the relationship between the two countries.

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

"This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan," he said.

The levies, which are scheduled to take effect Aug. 1, would dramatically escalate U.S. tariff policy and threaten to hike prices for everyday goods ranging from coffee to shoes. Trump delayed the so-called "reciprocal tariffs" in April,

Trump added that Japan will open to trade, including cars, trucks, rice and certain agricultural products.

Analysts at Citi and at Deutsche Bank have looked into who is paying for the tariffs imposed by the Trump administration this year.