The US and Japan have entered a strategic partnership, aiming to achieve energy security and secure critical mineral supply chains.
Under the first wave of agreement with the Trump administration, Japan will invest in US oil, gas and critical minerals worth $36 billion.
The deal is part of a much larger $550 billion investment pledge made by Tokyo under a trade deal struck last year with the US.
In exchange for these investments, President Trump agreed to lower tariffs on Japanese exports, specifically the automotive sector.
The announcement comes amid growing diplomatic tensions between China and Japan over Taiwan security.
The deal encompasses three major projects:
- A 9.2-gigawatt power plant in Portsmouth, Ohio. It is considered as the largest natural gas-fired facility in US history operated by SoftBank subsidiary SB Energy.
- Tokyo will also invest in a deep-water crude oil export facility off the Texas coast to strengthen energy security.
- A $600 million manufacturing site for synthetic diamond grit which will allow the US to become self-sufficient in producing the grit, a useful material used in semiconductors and advanced manufacturing.
The project “will end our foolish dependence on foreign sources”, said Trump.
When it comes to critical mineral supply chains, China holds significant dominance in mining and processing of rare earth minerals.
Howard Lutnick, Trump’s commerce secretary, said, “We will no longer rely on foreign supply for this essential material.”
“The proceeds are structured so Japan earns its return, and America gains strategic assets, expanded industrial capacity, and strengthened energy dominance,” Lutnick added.
