The ambitious trade deal between America and Japan is beginning to take shape as the administration of US President Donald J. Trump unveiled the first set of multi-billion Dollar projects, according to a news report by Kyodo News.
To put things in perspective, posted below is an excerpt from the news report of Kyodo News. Some parts in boldface…
U.S. President Donald Trump’s administration said Tuesday that Japan will finance the production of synthetic diamonds and two energy projects worth about $36 billion as the initial tranche of investments under a deal reached last year following months of tariff negotiations.
Trump’s announcement that the three projects had been selected, as part of a $550 billion package that Japan committed to in exchange for his administration reducing tariffs on Japanese cars and other goods, was confirmed hours later by Japanese Prime Minister Sanae Takaichi.
“These projects are so large, and could not be done without one very special word, TARIFFS,” Trump wrote on his Truth Social platform. “America is building again. America is producing again. And America is WINNING again.”
Calling it a historic time for the United States and Japan, he said a critical minerals project will be carried out in Georgia, along with plans for an oil facility in Texas and power generation infrastructure in Ohio.
Commerce Secretary Howard Lutnick said the United States and Japan will build the largest-ever natural gas infrastructure in Ohio, expected to produce 9.2 gigawatts of power, a deepwater crude oil export facility in the Gulf of Mexico and establish synthetic industrial diamond manufacturing capacity in the United States.
Lutnick said the deepwater facility is likely to generate $20 billion to $30 billion in U.S. crude oil exports annually.
Takaichi said on social media that the gas infrastructure will power artificial intelligence data centers, and the production of synthetic diamonds used in the semiconductor, auto and aviation industries is aimed at reducing the two countries’ overreliance on a specific country, without naming China.
“Going forward, Japan and the United States will continue working closely to further coordinate the details for implementing each project, ensuring their early and smooth execution,” Takaichi said in an X post.
Under a trade deal struck in July last year, Japan has committed to investing $550 billion in the United States by the end of Trump’s second term in January 2029.
Japan’s commitment comprises investments, loans and loan guarantees from Japanese government-backed financial institutions.
Japan’s industry minister Ryosei Akazawa told reporters in Tokyo that about $33.3 billion will be invested in the gas infrastructure, with Japanese companies such as Hitachi Ltd., Mitsubishi Electric Corp., Toshiba Corp. and SoftBank Group Corp. interested in participating in the project.
The project to increase U.S. crude oil exports is valued at $2.1 billion and the production of synthetic diamonds is worth $600 million, according to Akazawa, who mentioned Japanese firms such as Mitsui O.S.K. Lines Ltd., Nippon Steel Corp. and Asahi Diamond Industrial Co. in connection with these initiatives.
Last week, Akazawa and Lutnick agreed in Washington to speed up the selection process for the first round of investments, as the two countries prepare for Takaichi’s visit to the United States next month.
Japan and the United States have said that the investments will focus on strategic sectors, such as critical minerals, semiconductors, artificial intelligence and energy, to advance their national security interests and economic objectives.
The memorandum of understanding between Japan and the United States, signed by Akazawa and Lutnick in September last year, stipulates that Trump will ultimately choose projects recommended by an “investment committee” chaired by the commerce secretary and composed solely of U.S. officials.
Let me end this piece by asking you readers: What is your reaction to this development? Do you think the first projects of the US-Japan trade deal will create huge economic impact over the next few years? What other ambitious projects do you think Japan and America will focus on next?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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