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.

Japan's trade agreement with the U.S. could serve as the benchmark for many other deals currently being negotiated with Washington, and the global economy could just about support the 15% level agreed overnight,