The Tamesis
Japan has agreed to the first investment it has committed to the United States as part of its massive $550 billion trade deal with President Donald Trump.
Trump announced on Tuesday that Tokyo had pledged $36 billion in funding for three infrastructure projects. This comes as Japan faces pressure to fulfill its commitments Commitments made in 2025 in exchange for lower U.S. trade tariffs.
“Japan is now officially and financially moving forward with the first tranches of its $550 billion commitment to invest in the United States,” Trump wrote on his Truth Social platform.
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“These projects are of such magnitude that they would not be possible without a very specific word – tariffs,” he wrote.
The announcement comes ahead of Prime Minister Sanae Takaichi’s planned visit to the White House next month, following Trump’s visit to Japan in October.
The projects will “strengthen the Japan-U.S. alliance by enabling Japan and the United States to jointly build resilient supply chains in strategically important areas for economic security, such as critical minerals, energy and artificial intelligence/data centers,” Takaichi said on Wednesday.
“We believe that these measures truly reflect the purpose of the strategic investment plan, which is to promote mutual benefit between Japan and the United States, strengthen economic security, and promote economic growth,” Gao Yi said on X day.
“Going forward, we will continue to work closely with Japan and the United States to further refine the details of each project to ensure they can be implemented quickly and smoothly,” she added.
Huge trade win: Lutnick
These projects include natural gas facilities in Ohio, deepwater oil export facilities in the Gulf of Mexico, and synthetic diamond manufacturing facilities.
U.S. Trade Secretary Howard Lutnick called the announcements “America’s first trade victory.”
Lutnick said on
Takaichi said it will provide power for artificial intelligence data centers and similar facilities.
According to Bloomberg, when operating at full capacity, this is equivalent to the power of nine nuclear reactors or the electricity consumption of approximately 7.4 million households.
Lutnick said the oil project would generate $20-30 billion in annual revenue from U.S. crude oil exports and “solidify the United States’ position as the world’s leading energy supplier.”
Lutnick said the plant, which produces synthetic diamond grit, for which China dominates supply, will ensure the United States is no longer dependent on foreign imports.
“Japan is providing funding (for all three projects). The United States is building the infrastructure,” the US Commerce Secretary added.
“The proceeds are structured so that Japan gets a return and the U.S. gets strategic assets, expands industrial capacity and strengthens its energy dominance,” he said.
U.S. tariffs reduced to 15%
In July, Tokyo agreed to invest $550 billion by 2029 to “rebuild and expand core U.S. industries,” according to the White House.
In exchange for this commitment, the United States will reduce tariffs on Japanese imports from 25% to 15%.
Japan’s Minister of Economy, Trade and Industry Ryoaki Akazawa said that only 1-2% of the US$550 billion is actual capital.
The remainder will be made up of bonds and loans from the Japan Bank for International Cooperation (JBIC) and publicly guaranteed credit.
Time has passed before the senior high school student is scheduled to visit the White House on March 19, and according to media reports, tempers are starting to become tense.
In January, Trump told South Korea — that it planned to invest $350 billion — He will raise tariffs Because it “failed to live up to its end of the bargain.”
Analysts said Japanese companies may be wary because of unclear administrative and financial procedures and concerns about U.S. labor shortages.
- Further editing by Jim Pollard, AFP
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