Donald Trump to Direct Japan’s $550bn Investment in US after Deal with Tokyo

President will pick which projects receive capital, according to unpublished memo

Core Deal:

Japan avoids 25% tariffs on its exports to the U.S. by agreeing to invest $550bn in the American economy. In return, tariffs drop to 15%.

Trump’s Control:

According to the unpublished memorandum, Donald Trump personally selects which projects receive the Japanese capital. If Japan doesn’t release funds within 45 days, tariffs snap back.

Profit-Sharing Terms:

· Until Japan’s $550bn is repaid → profits are split 50/50 between Japan and the U.S.

· After repayment → the U.S. keeps 90% of proceeds, leaving Japan only 10%.

Strategic Angle:

· Japan avoids a crippling tariff burden while securing a role in U.S. projects.

· Washington gets an enormous injection of foreign capital plus future profit control.

· A clause encourages Japanese suppliers to be used in projects — possibly softening the blow for Tokyo’s industries.

Broader Pattern:

This deal fits into Trump’s wider trade and industrial strategy:

· Forcing Nvidia & AMD to share revenue from China sales with the U.S. government.

· White House taking a 10% stake in Intel.

· Trump approving Nippon Steel’s $15bn takeover of U.S. Steel in exchange for a golden share.

Implications:

· Geopolitical: It shows how far allies like Japan are willing to go to escape tariffs.

· Economic: Effectively turns U.S. trade policy into a mechanism for direct government profit.

· Risk: Japanese officials had earlier suggested a different profit-sharing model, hinting at internal political friction.

[ABS News Service/10.09.2025]

Japan has agreed to let Donald Trump decide where $550bn worth of its capital is invested in the US as part of a deal to avoid high tariffs, according to an unpublished memorandum signed by the two countries.

The memo, signed on Thursday in the US when Trump officially enacted the trade deal, also gives Japan just 45 days to fund projects earmarked by the president — or face the reimposition of his steep tariffs.

The unusual terms agreed between the US president and the world’s fourth-largest economy underscore the extraordinary lengths that Washington’s trading partners will go to in order to secure tariff relief.

Japan, one of the Washington’s closest allies, had faced a tariff on its exports to the US of 25 per cent. The new deal reduces it to 15 per cent.

South Korea and the EU have also pledged to plough huge sums into the American economy in a bid to avert punitive taxes on their exports.

But the details surrounding such promises have until now been hazy — and Washington and other foreign capitals have offered diverging accounts of the terms.

Japanese officials previously offered a different account from Trump’s officials about how the proceeds of their investment into the US would be split with Washington, suggesting the shares would reflect the size of each country’s investment.

The new memorandum seen by the Financial Times showed that the US would strongly benefit from the profits on Japan’s $550bn worth of investments.

The countries will evenly split the cash flow generated until Japan’s investment is paid off — at which point the US will take 90 per cent of the proceeds.

The deal is the latest in a series of unorthodox moves by the president aimed at boosting US government profit and reordering global trade to favour his “America First” agenda.

Last month, Trump struck a deal with US chipmakers Nvidia and AMD that will see them pay the administration a portion of revenue generated by chip sales in China. The White House has also said it would take a 10 per cent stake in chipmaker Intel.

Trump also earlier approved this year took a golden share in US Steel as part of his approval of Japanese producer Nippon Steel’s $15bn takeover of the company.

The billions of dollars promised to the US by Japan come as part of a broader deal struck to lower Trump’s punitive so-called reciprocal tariffs. Aside from dropping the headline rate, the US also reduced the levy on Japanese cars and car parts from 27.5 per cent to 15 per cent.

The US codified the new tariff rates in an executive order at a ceremony with Japanese officials at the commerce department.

The memorandum said Trump would be given the final pick of potential investment projects put to him by an investment committee chaired by US commerce secretary Howard Lutnick.

The memo also sets out that the investment committee should attempt to choose Japanese suppliers to “provide goods and services” for any of the projects invested in, where possible.

“This initiative could have a positive medium- to long-term impact on Japanese exports, depending on the procurement ratios,” Morgan Stanley economist Takeshi Yamaguchi wrote in a note to clients on Friday.