Japan's Chief Trade Negotiator: Only 1-2% of $550 Billion Investment Commitment to the US is Actual Investment, with the Rest Provided through Loans

Japan's Chief Trade Negotiator Akizuki Ryōsei stated that the country expects only 1-2% of its recent commitment to invest $550 billion in the US will be actual investment, while the majority will be provided through loans.

At the same time, he pointed out that by reducing tariffs through a trade agreement with the US, Japan will save approximately ¥10 trillion (approximately $680 billion).

Akizuki Ryōsei told NHK on Saturday evening that the investment framework of $550 billion will be composed of investments, loans, and guarantees provided by Japanese government-backed financial institutions. He stated that the investment portion will account for 1% or 2%, with Japan and the US sharing the investment profits at a ratio of 90:10. He added that Japan initially proposed a ratio of 50:50.

The $550 billion investment is the core content of the trade agreement announced by Japan and the US, but Akizuki Ryōsei's revelation shows that Japan may have made more concessions than initially thought.

"It's not like we're sending a $550 billion cash gift to the US," Akizuki Ryōsei said. "If they take away 90% of the profits instead of 50%, I think Japan's loss will be limited to a few hundred billion yen. External opinions vary, with some saying 'you've sold out Japan,' but they're wrong."

He stated that for the loans provided through this plan, Japan will only collect interest; and for guarantees, if there are no issues, Japan will also only collect a fee. "From this perspective, Japan is making a profit," he said.

He also clarified that the investment plan will not only support Japanese and US companies but also Taiwanese companies, citing an example of a Taiwanese semiconductor company setting up a factory in the US.

"We hope to implement this $550 billion investment plan during Trump's term," Akizuki Ryōsei said.

Many details about the implementation of the Japan-US agreement are still unclear, including when new tariffs will take effect and when new investment tools will be launched. The two sides have not yet signed any joint documents, but the White House has released a fact sheet.

"If you say 'let's draft a joint document,' they'll say 'we'll only reduce tariffs after we've drafted it,'" Akizuki Ryōsei said. "To avoid wasting time, we will ask them to quickly issue an executive order reducing tariffs, regardless of whether a joint document is drafted."

Akizuki Ryōsei had previously stated that he expected 15% of the US's comprehensive tariffs on Japan to take effect on August 1st, while also expressing hope that car tariffs will be lowered to 15%, but did not specify a specific date.