Trump activates first phase of $550 billion US-Japan trade deal with mega-energy projects

US President Donald Trump has announced the formal commencement of the first project package under the landmark US-Japan trade agreement signed last summer, signaling a major activation of bilateral economic cooperation.

Taking to Truth Social, Trump declared that the “HUGE Trade Deal with Japan is officially LIVE!” He further noted that Tokyo is now formally and financially proceeding with the initial set of investments as part of its $550 billion commitment to the United States.

The President identified the inaugural projects as a gas-fired power plant in Ohio, a liquefied natural gas facility—located in the Gulf of Mexico, which Trump has rebranded as “America’s Gulf”—and a critical minerals facility in Georgia. In a subsequent post, Commerce Secretary Howard Lutnick clarified that the second project is actually a “deepwater crude oil export facility” rather than an LNG terminal.

Under the terms of the trade agreement reached last summer, Tokyo committed to investing or providing loans and credit guarantees for US-based projects totaling $550 billion. In exchange, the Trump administration reduced reciprocal and sector-specific tariffs to 15%. Trump has consistently characterized these funds as “investments” and likened them to a cash “signing bonus” for the American economy.

In his Tuesday announcement, Trump asserted that this historic agreement provides the blueprint for revitalizing the American industrial base, generating hundreds of thousands of jobs, and fortifying both national and economic security.

Trump described the Ohio gas plant as slated to be the largest in history, while the Gulf facility is expected to further cement American energy dominance. He emphasized that the Georgia critical minerals plant would end the nation’s “STUPID reliance on foreign sources.”

“The scale of these projects is so massive,” Trump wrote, adding that they would never have materialized without the leverage provided by his tariff threats. “America is building again. America is manufacturing again. And America is WINNING again,” he continued, framing the moment as a historic era for both the US and Japan.

Commerce Secretary Howard Lutnick provided further technical details, noting that the Ohio gas plant will generate 9.2 gigawatts of electricity. The deepwater crude oil export facility is projected to generate between $20 billion and $30 billion in annual revenue from US crude exports. Furthermore, the Georgia critical minerals facility will focus on the production of synthetic industrial diamonds.

“Japan provides the capital. The infrastructure is built in the United States,” Lutnick explained. He noted that while the revenue structure ensures Japan achieves its return on investment, the US gains strategic assets, expanded industrial capacity, and bolstered energy supremacy.

Japanese Prime Minister Sanae Takaichi, posting on social media during Wednesday morning hours in Tokyo, stated that the agreement would yield “reciprocal benefits” for both nations, ensuring economic security and stimulating growth. She confirmed that Japan would maintain close coordination to clarify details and ensure the “rapid and smooth implementation” of the projects.

Japanese Economy Minister Ryosei Akazawa echoed these sentiments on Wednesday, stating that the two nations will collaborate to build supply chains in sectors vital to economic security, including critical minerals, energy, and AI data centers.

Speaking to reporters, Akazawa described the investments as the “fruits of a win-win relationship” and a unique economic partnership. He noted that for Japanese firms, the deal is expected to expand business opportunities and increase sales, including the supply of related equipment and machinery. He emphasized that the benefits would extend beyond major corporations to reach small and medium-sized enterprises within the supply chain.

According to the Minister, the Japanese firms involved in these projects include Asahi Diamond Industrial and Noritake for synthetic industrial diamonds; Mitsui O.S.K. Lines, Nippon Steel, JFE Steel, and MODEC for the crude oil export facility; and Toshiba, Hitachi, Mitsubishi Electric, and SoftBank Group for the gas-fired power plant.

Akazawa also hinted that additional projects might be unveiled during Prime Minister Takaichi’s scheduled visit to the US in March. Having participated in the negotiations during his tenure in the previous cabinet, Akazawa expressed confidence that the strong rapport between Takaichi and Trump would make the upcoming visit “even more productive.” SoftBank Group declined to comment on the US announcement.

Market analysts have begun to scrutinize whether these projects qualify as traditional Japanese investments. Under the trade agreement, the US and Japan agreed to establish a $550 billion fund to finance strategic sectors including semiconductors, pharmaceuticals, critical minerals, metals, shipbuilding, energy, AI, and quantum computing.

While Japan provides the financing, the agreement stipulates that profits and dividends from the projects will be shared on a 50-50 basis until Japan recovers its principal investment and interest. William Chou, a senior fellow at the Hudson Institute, characterized the arrangement as a “$550 billion credit fund.”

In a Hudson policy note published this month, Chou wrote: “From the American perspective, the investment fund holds clear appeal for the White House as it reinforces administration efforts to rebalance foreign obligations and reinvest in the revitalization of American industry. However, using more accurate terms like ‘credit fund’ or even an ‘industrial leadership fund’ would achieve the same effect without creating unnecessary concern among the Japanese public.”