Japan, US to advance cooperation on US$550 billion trade deal

Japan and the United States have confirmed they will advance cooperation on investing in strategic sectors and honour the other terms of a trade deal they reached last year, even though President Donald Trump’s tariff policies have changed significantly over time.

“We reaffirmed that last year’s agreement remains unchanged,” Japan’s Trade and Industry Minister Ryosei Akazawa told reporters in Washington on Friday, after meeting Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer separately.

Akazawa said the US would not impose any higher tariff rates on goods from Japan than those agreed to bilaterally in July last year.

He also said he agreed with the US officials that the two countries would reinforce supply chains for critical minerals.

During his meeting with Greer on Friday, Akazawa said they shared the view that China’s “arbitrary export controls” posed a risk of causing “significant damage to the supply chains of both Japan and the United States”.

Japan has stuck to the trade deal’s terms, even after the US Supreme Court invalidated Trump’s sweeping country-specific tariffs in February.

Under the agreement, Japan has committed US$550 billion to US-based projects in strategic industries, such as oil and gas, critical minerals and nuclear power, through investments, loans and loan guarantees to be issued by the end of Trump’s second term.

In return for the investment commitment, the Trump administration set tariffs on Japanese cars and other products at 15 per cent, lower than initially threatened, and later promised to give the country “no-stacking” treatment.

Under the special treatment, imports from Japan with pre-existing tariffs of 15 per cent or higher are exempt from further levies.

In mid-February, Japan and the US announced the first three projects, worth about US$36 billion, which include a gas-fired generating facility in Ohio, the largest of its kind in US history, to power artificial intelligence data centres.