(Bloomberg) — Japan plans to invest up to $36 billion in US oil, gas and critical mineral projects, the first tranche of its $550 billion commitment under the trade agreement it struck with President Donald Trump.
“Our MASSIVE Trade Deal with Japan has just launched!” Trump posted Tuesday on social media. “The scale of these projects are so large, and could not be done without one very special word, TARIFFS.”
Japanese Prime Minister Sanae Takaichi said the projects were designed to build resilient supply chains through cooperation in areas crucial for economic security, including critical minerals, energy and artificial intelligence.
“We believe this initiative is fully aligned with its core objectives: promoting mutual benefits between Japan and the United States, ensuring economic security, and fostering economic growth,” she wrote.
The most significant investment is a natural gas facility in Ohio that’s expected to generate 9.2 gigawatts of power, according to a statement from US Commerce Secretary Howard Lutnick, a massive project which Trump described as “the largest in History.”
Japan is expected to invest up to $33 billion in the gas plant, which will be led by SoftBank Group Corp. subsidiary SB Energy, according to a US Commerce Department fact sheet outlining the investments. Japan’s Ministry of Economy, Trade and Industry listed SoftBank Group as the company involved in the project.
Japanese companies Toshiba Corp. and Hitachi Ltd. have also expressed interest in participating in the gas project, the country’s trade minister Ryosei Akazawa told reporters on Wednesday.
If that plant operates at full capacity, it would be the equivalent of nine nuclear reactors or roughly the amount of power consumed by about 7.4 million homes on the largest US grid operated by PJM Interconnection LLC.
Earlier: SoftBank, Toshiba Among Firms Interested in US-Japan Gas Project
The second project is a deepwater crude export facility in the Gulf of Mexico, according to Lutnick. The $2.1 billion investment into the Texas GulfLink export terminal will be operated by Sentinel Midstream and is expected to generate as much as $30 billion in annual US crude exports when operating at full capacity, according to the Commerce Department fact sheet.
Trump’s initial social media post about the project sowed 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 diamonds are a “critical input for advanced industrial and technological production,” Lutnick said.
The project — a high-pressure, high-temperature synthetic diamond grit facility — will receive a $600 million investment and involves Element Six, a subsidiary of De Beers, according to the Commerce Department. Diamond grit is used by industrial manufacturers — including in the semiconductor, automotive and energy sectors — for its hardness properties.
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 Minoru Kihara 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 Takaichi is set to meet with Trump in Washington.
The selection comes after a joint panel first met in December to consider projects, which are 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 US industries and was a central pillar of the tariff deal, under which the US president agreed to set levies at 15% on Japanese products and lower the duty for automobiles, a critical driver for Japan’s economy. The $36 billion total is equivalent to more than half of Japan’s net foreign direct investment in the US in 2025, according to Japanese Finance Ministry figures.
Implementation of the agreement is likely to be a top agenda item during the meeting between Trump and Takaichi in Washington expected to take place March 19.
Lutnick and Akazawa met in Washington last week to hash out the details of the first tranche of investments. Akazawa said he doesn’t expect projects backed by the $550 billion fund to be high-risk, high-return, signaling the Japanese are seeking initiatives with safe returns, rather than less-certain 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.
