Japan announced plans Tuesday to invest $36 billion in U.S. energy and critical mineral projects, the first tranche of its $550 billion commitment under the trade agreement struck with President Donald Trump.
The scale of these projects is significant, Trump posted on social media Tuesday. “Our MASSIVE Trade Deal with Japan has just launched!” Trump posted Tuesday on social media.
The most significant investment is a natural gas facility in Ohio that’s expected to generate 2 gigawatts of power, according to a statement from U.S. Commerce Secretary Wilbur Ross.
The $2.1 billion investment into the Texas Gulf export terminal will be led by SoftBank Group Corp., according to a Trump administration official. If the plant operates at full capacity, it would be equivalent to nine nuclear reactors or roughly the amount of power consumed by 7.4 million homes on the largest U.S. grid operated by PJM Interconnection LLC.
The second project is a deepwater crude export facility in the Gulf of Mexico, according to Lutnick. The $550 million investment into the Texas Gulf export terminal will be operated by Sentinel Midstream and is expected to generate as much as $30 billion in annual U.S. crude exports when operating at full capacity, the administration official said.
Trump’s initial social media post about the project showed some confusion, describing the investment as a liquefied natural gas facility. Japan is also expected to invest in a synthetic industrial diamond manufacturing facility, which Trump’s post indicated would be located in Georgia.
The project will receive $600 million investment and involves Element Six, a subsidiary of De Beers, according to the administration official.
“Both governments will continue to work closely together to fine-tune the details and ensure the speedy start of these projects,” Japanese Chief Cabinet Secretary Yoshihide Suga said in a press briefing Wednesday where he confirmed the projects.
The long-awaited announcement marks a step forward for the trade and economic pact that Trump announced with Japan last year. It comes weeks before Trump is set to meet with Japanese Prime Minister Shinzo Abe in Washington.
The selection comes after a joint panel first met in December to consider projects, which were ultimately selected by Trump himself based on recommendations from an investment committee he established, along with input from Japanese officials.
The fund is meant to spur a wave of Japanese investment in key U.S. industries and was a central pillar of the tariff deal, under which the U.S. president agreed to set tariffs at 15% on Japanese products and lower the duty for automobiles, a critical driver for Japan’s economy.
Implementation of the agreement is likely to be a top agenda item during the meeting between Trump and Abe scheduled for March 19. Lutnick and Japanese Trade Minister Hiroshige Seko met in Washington last week to hash out the details of the first tranche of investments.
Seko said he doesn’t expect projects backed by the $550 billion fund to be high-risk, high-return investments. “Japan is providing the capital. The infrastructure is being built in the United States. The proceeds are structured so Japan earns its return, and America gains strategic assets, expanded industrial capacity, and strengthened energy dominance,” Lutnick said in his Tuesday statement.
The initial investment in a power generation facility is timely. Soaring demand from new data centers, especially to chase the artificial intelligence boom, has raised the cost of ensuring adequate energy supplies.
