President Trump's trade strategy, marked by elevated tariffs, is yielding agreements with nations like the EU, Japan, and Vietnam. The EU accepted 15% US tariffs and committed to significant purchases and investments.

Analysts at Bank of America said that the Japan deal "looks like a reasonable blueprint" for other auto-exporting countries like South Korea.

Japanese automakers breathed a sigh of relief after U.S. President Donald Trump finalized a trade agreement last week. However, the relief is tempered by intensifying competition, especially from China,

Trump's trade deals with the EU and Japan pave the way for the stock market to end with it's third straight annual gain of more than 20%, Oppenheimer said.

The 15% tariff would be lower than previously threatened, but it would remain a high duty on America’s largest trading partner.

"The biggest piece in the trade deal puzzle still remains, and the Chinese are unlikely to be as willing to fold."

Japan’s surprise trade deal with the US sent its markets on a wild ride, pushing stocks to all-time highs and fueling a selloff in government bonds.