The United States and Japan have reached a trade deal with a provision that sets a 15% tariff rate on Japanese imports, but the agreement also includes a pledge from Tokyo to invest $550 billion in key American sectors. The White House claims the money will be deployed “at President Trump’s direction,” potentially giving him more control over U.S. industrial policy.
The investment vehicle aims to support strategic sectors such as energy infrastructure, semiconductors, critical minerals, pharmaceuticals, and shipbuilding. The U.S. will retain 90% of the profits, but the Japanese government disputes this, claiming a split based on “the degree of contribution and risk taken by each party.”
Analysts are skeptical about the pledge’s validity, citing thin details and concerns that it may not materialize. Bank of America described the deal as a “reasonable blueprint” for other auto-exporting countries like South Korea, but experts warn that labor costs in the U.S. are high, making it less likely for Japanese firms to expand investment.
The $550 billion pledge comes at a time when Trump’s tariffs face legal challenges, with a court hearing scheduled Thursday on their validity under the International Emergency Economic Powers Act. Some analysts believe this could make it attractive for countries to promise significant investments in the future to secure tariff relief while awaiting court decisions.
Source: https://fortune.com/2025/07/26/us-japan-trade-deal-trump-tariffs-550-billion-investment-vehicle