20 Pct of Japan’s Pledged U.S. Investments Underway, 1 Year On

Tokyo, July 19 (Jiji Press)–One year since Japan reached a deal with the United States in tariff negotiations, the progress rate of Japan’s investments in U.S. projects promised under the deal has reached about 20 pct in terms of value. Japan pledged to provide investments and loans worth up to 550 billion dollars, while the United States agreed to lower its tariffs on imports from Japan. Since the agreement was struck on July 22, 2025, six projects have been selected to receive investments and loans from Japan. As Washington has urged Japan to fulfill the investment commitments during the current term of President Donald Trump ending in January 2029, Japan needs to implement projects steadily so as to avoid getting slapped with U.S. tariffs higher than those imposed on other countries. While both sides hope that the deal will help strengthen supply chains for strategic materials, avoiding losses would be a big problem, given that some projects face uncertainties over profitability. At a press conference Tuesday, Japanese trade minister Ryosei Akazawa, who had been in charge of the tariff talks, emphasized the significance of reaching the deal after over three months of negotiations. “We’ll work to put together projects that will further serve mutual interests of Japan and the United States, ensure economic security and promote economic growth,” he said. Following the deal, the two governments moved quickly to select the projects that will receive funds from Japan. They picked three projects for the first round of investments and loans totaling 36 billion dollars and another three for the second round totaling up to about 73 billion dollars. The six projects include those related to artificial diamond production, infrastructure for U.S. crude oil exports, gas-fired power generation to meet growing electricity demand for artificial intelligence data centers and the construction of next-generation nuclear reactors, such as small modular reactors. For the first round of investments, the government-backed Japan Bank for International Cooperation, or JBIC, and private-sector banks signed contracts to provide 2.2 billion dollars in syndicated loans. Nippon Export and Investment Insurance, or NEXI, owned by the government, will provide insurance for the private-sector loans. Although Trump has yet to make an official decision on the second round, a source said, “There is no change in our stance of moving things along quickly.” The two countries are in talks on the construction of nuclear power plants. While the deal will help further Japan-U.S. ties, it is also “effective as a deterrent to China,” Kazuto Suzuki, professor at the University of Tokyo’s Graduate School of Public Policy, said in a recent interview. Still, the process to select the six projects was “quite hasty,” he said, calling for an arrangement to “allow Japan to adjust the speed” at which projects are picked. The Japanese government faces unrelenting criticism on the sheer size of the proposed investments and loans spent on a foreign country. While the United States has the final say in where Japan’s money goes, JBIC and NEXI will incur losses if a project fails. The cost will be borne by Japanese taxpayers. “By participating in projects, we would be able to improve our own technologies, invest for crisis management and growth and make our economy stronger,” Akazawa said, explaining the advantages for Japan. The establishment of a production system for artificial diamonds used in processing parts for automobiles and semiconductors would mean less dependence on China, which controls about 90 pct of the global market for artificial diamonds. Developing crude oil export infrastructure will help ensure a stable energy supply to Japan. A diplomatic source said that investments in the power and other industries “will make it easier for Japanese companies to participate in regulated U.S. industries.” The tariff deal has laid “the foundations of Japan-U.S. cooperation over critical minerals and AI,” a senior Foreign Ministry official said. Another objective of Japan’s investments and loans to the United States is to reduce China’s influence over supply chains for strategic goods through the cooperation between Japan and the United States. Trump, however, is moving to ease tensions with China. He decided at a summit with Chinese President Xi Jinping in May to set up a trade commission to discuss tariff cuts on both sides. Xi is scheduled to visit the United States in September for another bilateral summit. If the United States goes over Japan’s head and forges closer ties with China, “the meaning of investments and loans to the United States could be called into question,” a Japanese government official said. END [Copyright The Jiji Press, Ltd.]