Despite the initial fanfare, experts are skeptical about the full implementation of Japan’s $550 billion investment pledge in the U.S., as per a recent report.
Questions Raised Over Japan Deal
The massive investment deal was announced by President Donald Trump in July, with Japan promising to invest heavily in the U.S. and create hundreds of thousands of jobs. However, experts now doubt the full realization of this pledge, as reported by the Japan Times on Monday.
Richard Katz, an economist specializing in Japan, told the publication that he didn't think the agreement would “ever be implemented” as it stands and that it was unlikely to happen. He added that Japan was essentially "yessing the U.S. to death" and suggested that the real negotiations were taking place now.
At the same time, Paul Nadeau, a professor at Temple University’s Japan campus, also expressed skepticism, saying that he would be “very surprised” if the full $550 billion ever materialized.
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US-Japan Tariff Deal Profit Split Details
The deal, announced in July, was hailed as a historic agreement that would see Japan investing heavily in the U.S. and creating jobs. Trump had hailed the move, saying, "This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it."
Commerce Secretary Howard Lutnick later stated that the U.S. and Japan agreed to share the profits from projects funded by Japan through the new tariff deal until the initial investment is recovered. Once Japan recoups its $550 billion, the profit split will shift to 90% for the U.S. and 10% for Japan.
However, doubts have been raised about the actual investment amount and the nature of the investment. Japan’s top negotiator, Ryosei Akazawa, clarified that only 1% to 2% of the $550 billion agreement would be actual investment, with the rest structured as loans and guarantees.
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