President Trump revealed details Tuesday regarding the initial investments from a $550 billion fund established through a trade agreement with Japan, a deal that initially drew skepticism from some economists.
In July of last year, Donald Trump secured a trade agreement with Japan, which he at the time described as “perhaps the largest deal in history.” The agreement establishes a $550 billion investment fund, with the U.S. Slated to receive 90% of the returns.
The first projects earmarked for investment from the fund were announced Tuesday: President Trump stated that funds will be directed toward a gas-fired power plant in Ohio, a critical minerals facility in Georgia, and a liquefied natural gas facility in Texas.
Japan plans to invest $36 billion in these initial projects, according to Bloomberg. The investments come as Japan’s Prime Minister Sanae Takaichi is scheduled to meet with President Trump in the coming weeks.
“The size of these projects is so massive that they couldn’t have been done without one incredibly special word: TARIFFS,” Trump wrote on Truth Social Tuesday evening.
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The deal, finalized last year, also includes reduced tariffs on Japanese goods, including automobiles, from 25% to 15%, and commitments from Japan to open its markets to American vehicles, rice, and other agricultural products.
“I can’t fathom how a Japanese administration would have agreed to such a deal,” said Harald Magnus Andreassen, chief economist at Sparebank 1 Markets, when the agreement was first announced last year. The initial reaction to the trade deal highlighted concerns about its potential impact on global trade dynamics.
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