Trump announces the official launch of $550 billion US-Japan investment, with the first phase focusing on oil and gas, power generation, and critical minerals.

On Tuesday the 17th Eastern Time, U.S. President Trump announced the launch of the first batch of projects under Japan’s $550 billion investment commitment to the United States. This marks the implementation of the key content of last year’s tariff agreement between the two countries, as well as progress in the Trump administration’s trade strategy of leveraging tariffs to promote investment in critical U.S. industries from overseas.

According to Trump’s post on his social media platform, the first batch of projects under the $550 billion investment focuses on energy and critical minerals sectors. He noted that funds will go toward a gas-fired power plant in Ohio, a critical minerals project in Georgia, and a liquefied natural gas facility in Texas. These projects aim to revive America’s industrial base, strengthen its energy dominance, and reduce dependence on foreign critical minerals.

Commentators believe that the initial investments will pave the way for Japanese Prime Minister Sanae Takaichi’s visit to the U.S. and meeting with Trump on March 19. The above investment mechanism was an exchange condition of 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 had reached a trade agreement to reduce the reciprocal 25% tariff rate to 15%, and that Japan would invest $550 billion in the U.S. and open up its market for rice and other agricultural products.

The Japanese and U.S. governments have not specified project financing methods or participating companies. However, under the agreement framework, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance are expected to take leading roles in project financing, with funds primarily provided in loans and loan guarantees, and direct cash investment accounting for only 1–2%.

Trump says tariffs fostered large-scale investments

Trump posted on his social media this Tuesday: “Japan has now formally and substantively launched its first batch of projects under the $550 billion investment commitment to the United States—a historic part of our trade agreement designed to revitalize America’s industrial base, create hundreds of thousands of high-quality U.S. jobs, and strengthen our national and economic security like never before.”

The three “major projects” he announced are related to oil and gas strategy in Texas, power generation in Ohio, and critical minerals in Georgia. Trump specifically emphasized: “These projects are so large that without one very special word—tariffs—they would not have happened.”

Trump stated that the gas-fired power plant in Ohio will be the “largest ever,” the liquefied natural gas (LNG) facility in the Gulf of Mexico will promote exports and further consolidate America’s energy dominance, and the critical minerals facility will end the United States’ “foolish reliance on foreign resources.” He said, “America is rebuilding, reproducing, and winning again.”

First batch of projects finalized after months of tough negotiations

The initial investment projects are the result of months of tough negotiations between the U.S. and Japan.

Last Thursday, U.S. Commerce Secretary Lutnick met with Japan’s chief trade negotiator and Minister of Economy, Trade, and Industry Akazawa Ryo in Washington to discuss details of the first batch of investment projects. Akazawa said last week he did not expect the projects supported by the $550 billion fund to be high-risk, high-reward types, indicating that Japan seeks projects with stable returns, rather than highly uncertain investments.

However, reports indicate differences remain after the talks. Akazawa said last Thursday: “Despite the enormous efforts of staff, the two sides still have significant differences.” At the time, he said he could not determine when the first projects would be finalized or announced. According to Japanese media, Akazawa said there are “still huge differences” between Japan and the U.S., and further coordination is needed.

According to the bilateral agreement, projects are recommended by an investment committee chaired by Lutnick, with the Japanese side providing input on feasibility during consultations, and Trump making the final selection. During Trump’s visit to Japan last year, potential projects ranged from $350 million to $100 billion, covering energy, artificial intelligence, and critical minerals, and involving companies such as SoftBank Group, Westinghouse Electric, and Toshiba.

Tariffs tied directly to investments to pressure Japan to meet commitments

The investment fund is a core pillar of last year’s U.S.-Japan tariff agreement, intended to drive 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 for automobiles, a critical driver of Japan’s economy. In exchange, Japan agreed to increase U.S. investment through the $550 billion mechanism.

The agreement stipulates a strict compliance mechanism. Once a project is determined, Japan must start funding within 45 working days. If Japan opts not to finance a given project, the U.S. may recoup certain proceeds or re-impose tariffs, meaning tariffs on Japanese imports could return from 15% to the 25% level previously threatened by Trump.

Trump has expressed dissatisfaction with the implementation pace of a similar agreement with South Korea, and has threatened to raise tariffs on Korean imports again. According to Nikkei, Trump is unhappy with the progress on the $550 billion commitment, believing Japan is delaying the process. This highlights the direct link between investment commitments and tariff adjustments, adding urgency to Japan’s fulfillment of its obligations.

All investments must be completed before Trump’s term ends. Akazawa said last week that negotiations are “extremely difficult and about national interests, even more so than when we negotiated the tariff agreement.”

Paving the way for Sanae Takaichi’s U.S. visit

Implementation of this investment agreement will likely be the primary agenda for Sanae Takaichi’s visit to the United States on March 19. Takaichi secured a victory in the parliamentary elections earlier this month and has pledged to prioritize the development of a strong relationship with the United States. Trump has wished her great success on the “conservative, strength-for-peace agenda.”

Akazawa Ryo said last week: “Prime Minister Sanae Takaichi and President Trump have established an extremely strong relationship. Looking to make her visit to the U.S. even more fruitful, we will continue efforts to strengthen economic ties in line with the shared interests of Japan and the United States.”

Since the tariff talks began in April last year, Akazawa has visited Washington 11 times as of last week. Last week was his first U.S. visit since signing the memorandum of understanding with Lutnick in September last year outlining the agreement framework. He has also met with Lutnick multiple times in Tokyo and discussed the $550 billion commitment by phone.

Under the framework, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance are expected to play leading roles in project financing. The scale of direct investment remains unclear. Akazawa said last year that only 1–2% of the $550 billion mechanism is cash investment, with most provided as loans and loan guarantees.

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