Tokyo, Nov. 5 (Jiji Press)–The Japanese government intends to honor its pledge to provide investments and loans worth up to 550 billion dollars to the United States following the U.S. midterm elections. Tokyo made the commitment last year in exchange for lower U.S. tariffs on imports from Japan. Even as Democrats took control of the U.S. Congress in Tuesday’s elections, U.S. President Donald Trump will be able to raise tariffs using executive orders. The Japanese government aims to make the investment and loan pledge a bargaining chip for minimizing the impact of Trump’s unforeseeable moves, as well as a springboard for deepening Japan-U.S. economic security cooperation and promoting Japanese firms’ overseas operations. The United States last year agreed to limit its auto and reciprocal tariffs on Japan to up to 15 pct. Japanese industry minister Ryosei Akazawa has repeatedly said the deal helped Japan to slash U.S. tariffs by over 2 trillion yen from the previously expected 5 trillion yen every year. The Japanese government hopes to evade risks of additional tariffs by pushing ahead with the investments and loans. Tokyo Electron Ltd. will supply chip manufacturing equipment for a U.S. semiconductor plant project selected for the third round of Japanese funding under the commitment. Under the project, GlobalFoundries Inc., a U.S. semiconductor contract manufacturer, will build two plants. Japan’s Renesas Electronics Corp. plans to buy products made there. Using the project, Japan aims to underscore that its investments and loans are indispensable for U.S. industry. Tokyo also hopes that the project will ensure stable chip supply. Japan takes a lead from other countries in implementing investment and loan commitments made in trade talks with the United States, at over 20 pct. To keep Japan attractive to the United States, the country needs to continue funding to projects there that can strengthen supply chains for critical materials. END [Copyright The Jiji Press, Ltd.]
