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U.S. and Japan Clarify Terms of $550 Billion Investment for Tariff Cut

Only a tiny equity slice will earn U.S. profit shares, with most funds flowing through JBIC and NEXI without formal commitments signed.

A staff member distributes an extra edition of the Yomiuri Shimbun newspaper reporting that President Donald Trump announced a trade framework with Japan on Tuesday, Wednesday, July 23, 2025, in Tokyo. The headline reads "U.S., a 15% tax on goods imported from Japan." (AP Photo/Eugene Hoshiko)
Japan's Economic Revitalization Minister Ryosei Akazawa looks on during a press conference after meeting U.S. Secretary of the Treasury Scott Bessent, at Expo 2025 in Osaka, Japan, July 19, 2025. REUTERS/Kim Kyung-Hoon/File Photo
President Donald Trump speaks with reporters before departing on Marine One from the South Lawn of the White House, Friday, July 25, 2025, in Washington. The President is traveling to Scotland. (AP Photo/Alex Brandon)
Secretary of Commerce Howard Lutnick walks away from Air Force One upon President Trump's arrival at Joint Base Andrews, Md., Tuesday, July 15, 2025. (AP Photo/Luis M. Alvarez)

Overview

  • The framework fixes U.S. tariffs on Japanese goods including autos at 15%, down from the earlier 25% level.
  • Negotiators confirmed that just 1–2% of the $550 billion pledge will be equity investments eligible for a 90% U.S. profit share.
  • The remaining funds will be provided as loans and guarantees through Japan Bank for International Cooperation and Nippon Export and Investment Insurance under presidential direction.
  • Eligible projects extend beyond Japanese firms to include global players such as Taiwanese chipmakers building U.S. plants.
  • Legal details, governance structures and binding commitments are still under negotiation, prompting skepticism over whether the full pledge will materialize.