Trump announces the official launch of $550 billion in Japanese investment, with the first batch focusing on oil and gas, power generation, and critical minerals

On the 17th, Tuesday Eastern Time, U.S. President Trump announced the launch of the first projects under Japan's commitment to invest $550 billion in the U.S. This marks the implementation of the core content of last year's tariff agreement between the two countries and signifies progress in the Trump administration's trade strategy of using tariffs as leverage to promote foreign investment in key U.S. industries. According to Trump's post on his social media, the first projects under the $550 billion investment focus on energy and critical minerals. He stated that the funds will be directed towards a gas power plant in Ohio, critical mineral projects in Georgia, and liquefied natural gas facilities in Texas. These projects aim to revitalize the U.S. industrial base, reinforce energy dominance, and reduce dependence on foreign critical minerals. Commentators believe that the initial investments will pave the way for Japanese Prime Minister Fumio Kishida's visit to the U.S. on March 19 and his meeting with Trump. The investment mechanism is a condition of exchange under last year's U.S.-Japan tariff agreement. According to Xinhua News Agency, Trump stated on social media on July 22, 2025, that the U.S. and Japan reached a trade agreement, reducing the originally planned 25% reciprocal tariff rate to 15%, with Japan investing $550 billion in the U.S. and opening its market for agricultural products such as rice. The Japanese and U.S. governments have not yet specified the financing methods for the projects and the participating companies. However, according to the agreement framework, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance are expected to play a leading role in project financing, with funds primarily provided in the form of loans and loan guarantees, while direct cash investments will only account for 1-2%. Trump Claims Tariffs Facilitate Large-Scale Investment On Tuesday, Trump posted on social media: "Japan has now officially and practically advanced the first projects under its $550 billion investment commitment to the U.S.—this is part of our historic trade agreement aimed at revitalizing the U.S. industrial base, creating hundreds of thousands of high-quality American jobs, and unprecedentedly strengthening our national and economic security." The three "big projects" he announced involve Texas oil and gas strategy, Ohio power generation, and critical minerals in Georgia. Trump emphasized: "These projects are so large that they could not be realized without a very special word—tariffs." Trump stated that the gas power plant in Ohio will be "the largest in history," the liquefied natural gas (LNG) facilities in the Gulf of Mexico will boost exports and further solidify America's energy dominance, while the critical minerals facilities will end America's "foolish dependence on foreign resources." He said: "America is rebuilding, is re-manufacturing, and is winning again." Initial Projects Finalized After Months of Difficult Negotiations The initial investment projects are the result of months of difficult negotiations between the U.S. and Japan. Last Thursday, U.S. Secretary of Commerce Gina Raimondo and Japan's Chief Trade Negotiator, Minister of Economy, Trade and Industry Yasutoshi Nishimura, met in Washington to discuss the details of the initial investment projects. Nishimura stated last week that he does not expect the projects supported by the $550 billion fund to be of high-risk, high-return type, indicating that the Japanese side is seeking stable return projects rather than investments with high uncertainty However, reports indicate that there are still differences between the two sides after the talks. Akizawa stated last Thursday, "Despite the tremendous efforts of the staff, there are still significant differences between the two sides." He mentioned at that time that he could not determine when the first batch of projects would be finalized or announced. According to Japanese media, Akizawa stated that there are "still huge differences" between Japan and the U.S., requiring further coordination. According to the agreement reached by the two countries, the projects are recommended by the investment committee chaired by Lutnick, with the Japanese side providing opinions on the feasibility of candidate projects through a consultation process, ultimately selected by Trump himself. During Trump's visit to Japan last year, the potential project range identified by the two countries varied from $350 million to $100 billion, covering areas such as energy, artificial intelligence, and critical minerals, involving companies like SoftBank Group, Westinghouse Electric, and Toshiba. Tariffs and Investment Directly Linked to Pressure Japan to Comply The investment fund is a core pillar of last year's U.S.-Japan tariff agreement, aimed at promoting a wave of large-scale Japanese investment in key U.S. industries. Under the agreement, Trump set tariffs on Japanese imports at 15%, lowering the tariff level on automobiles, a key driver of the Japanese economy. In exchange, Japan promised to increase investment in the U.S. through a $550 billion mechanism. The terms of the agreement established a strict compliance mechanism. Once a project is confirmed, Japan has 45 working days to initiate funding. If the Japanese side chooses not to fund a certain project, the U.S. can reclaim certain benefits or reimpose tariffs, meaning that tariffs on Japanese imports could revert from 15% to the 25% level previously threatened by Trump. Trump has expressed dissatisfaction with the implementation progress of a similar agreement with South Korea and threatened to raise tariffs on South Korean imports again. According to Nikkei, Trump is unhappy with the discussion progress regarding the $550 billion commitment, believing that Japan is delaying the process. This situation highlights the direct link between investment commitments and tariff adjustments, adding urgency to Japan's compliance. All investments must be completed before the end of Trump's term. Akizawa stated last week that the negotiations are "extremely difficult, concerning national interests, even more so than when we negotiated the tariff agreement." Paving the Way for Suga Yoshihide's Visit to the U.S. The implementation of this investment agreement is likely to be a primary topic during Suga Yoshihide's visit to the U.S. on March 19. Suga secured victory in the congressional elections earlier this month and has promised to prioritize the development of strong relations with the U.S. Trump has wished Suga great success in his "conservative, strength-based peace agenda." Akizawa Ryozo stated last week, "Prime Minister Suga has established an extremely strong relationship with President Trump. Looking to achieve more fruitful results during her visit to the U.S., we will continue to advance various efforts to strengthen the economic relationship that aligns with the common interests of both Japan and the U.S." Since the tariff negotiations began in April last year, Akizawa has visited Washington 11 times as of last week. Last week marked his first visit to the U.S. since signing the memorandum of understanding outlining the agreement framework with Lutnick in September last year. He has also met with Lutnick multiple times in Tokyo and discussed the $550 billion commitment over the phone. According to the agreement framework, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance are expected to play a leading role in project financing. It is currently unclear what the scale of funding in the form of direct investment will be. Akizawa stated last year that only 1-2% of the $550 billion mechanism would be cash investment, with most provided in the form of loans and loan guarantees