Following a jaw dropping announcement by the U.S. President Donald Trump earlier this week that Japan is willing to invest as much as $550 billion in the U.S., Japan has clarified that profits from this bilateral tariff agreement with the United States will be shared according to each country’s level of contribution and exposure to risk.
The Japanese government said both nations would be active participants in the investment drive, countering speculation that Japan was simply pledging capital with little benefit in return.
While US officials have indicated that America expects to retain 90% of returns from the investment and loans Japan plans to make—primarily targeting US-bound projects in exchange for lower tariffs on Japanese exports such as automobiles and other goods—Tokyo asserts the structure is more nuanced and reflects an equitable sharing of risks and capital.
Japan’s chief trade negotiator Ryosei Akazawa stated on Friday that the 90-10 profit split reflects the proportional risk and investment by each side.
There’s a misconception that Japan is just handing over funds to the US, but that is not correct, Akazawa said, adding that the definitive allocation would ultimately be determined by participating private sector companies involved in the pending projects.
The investment package is notable for including loans and guarantees from Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI), both owned by the Japanese government. Legislative reforms in 2023 broadened JBIC’s mandate, allowing it to support foreign companies vital to Japan’s supply chains.
The strategic agreement aims to help both nations develop more secure and resilient supply chains, especially across key sectors deemed critical to national security such as semiconductors, pharmaceuticals, steel, and shipbuilding.
