Japan and US agree to expedite US$550 billion investment projects

[TOKYO] Japan and the US are set to speed up an initiative for Japan to invest US$550 billion into the US, agreed as part of a broader trade deal to lower tariffs imposed by US President Donald Trump.

“Ministers are aligned on expediting preparations so that the first project under the Strategic Investment Initiative could be announced as early as possible,” according to a statement released by the Japanese Foreign Ministry on Wednesday (Dec 24).

The consultation panel discussing the first project took place on Tuesday night. It was attended by Japanese Trade Minister Ryosei Akazawa, as well as Secretary of Commerce Howard Lutnick and Secretary of Energy Chris Wright from the US side, and lasted some two hours, according to the statement.

The first meeting for the initiative was held last week, marking the start of a formal selection process for the investment mechanism.

Once negotiations on the consultation panel is finalised, it will give its input to an investment committee led by Lutnick. The final greenlight for the investments will be given by Trump, based on that committee’s recommendations.

Japan could face the return of higher tariffs if it does not fund a project within 45 days of Trump’s decisions. Earlier this year, Trump threatened to raise tariffs on Japanese goods to 25 per cent, then scaled that back to 15 per cent for most goods after Japan agreed to boost investment in the US through the US$550 billion mechanism. BLOOMBERG