The United States and Japan have begun collaborating on projects related to the $550 billion investment commitment made by Tokyo in last year’s tariff agreement. The first phase of the projects has a total value of around $44 billion and aims to strengthen economic security in areas such as energy and semiconductors.
According to a report by the Nikkei Asian Review on Friday, the initial cooperation projects between the U.S. and Japan involve natural gas power generation, deepwater port construction, and lab-grown diamonds, with an estimated total cost of 6 to 7 trillion yen ($38 to $44 billion).
In July last year, the Japanese government reached an agreement with the Trump administration, committing to invest $550 billion by 2029 over three years in exchange for reduced tariffs from the U.S.
Japanese Minister of Economy and Industry Ryosei Akazawa and U.S. Secretary of Commerce Howard Lutnick are currently working on the specific details of the projects. The plan will be finalized in an upcoming ministerial meeting and ultimately decided upon by President Trump.
The current Japanese government, led by Prime Minister Sanae Takaichi, hopes to finalize the agreement before the U.S.-Japan summit on March 19.
The first investment project will be a 6 trillion yen natural gas power generation project, primarily managed by the SoftBank Group. This Japanese conglomerate will play a central role in the design and construction phases.
The natural gas power generation project is primarily intended to supply power to data centers. With the rapid advancement of artificial intelligence in the U.S., data centers are facing significant power demands. U.S. large heavy electrical equipment manufacturer GE Vernova is considered a potential participant in the project.
Japan is also investing in the construction of an oil export port capable of accommodating large tankers. The Trump administration is promoting energy exports and has loosened regulations on offshore deep-sea port construction.
The project, valued at trillions of yen, is located in the southern states of Texas and Louisiana. Max Energy, a U.S. port construction company, is expected to take the lead. Major Japanese general contractors have also been requested to participate.
Furthermore, the U.S. and Japan have listed lab-grown diamonds as a candidate project. Lab-grown diamonds are widely used in the industrial sector, including in semiconductor manufacturing. They are considered a key material for economic security.
The De Beers Group, the world’s largest diamond dealer based in the UK, will establish a manufacturing facility in the U.S. and supply to Japanese companies.
A special purpose vehicle (SPV) will be set up by Japan and the U.S. to invest in these three projects. The Japan Bank for International Cooperation (JBIC) will provide funding, while the top three Japanese banks will offer loans supported by Nippon Export and Investment Insurance (NEXI). The U.S. will contribute land and other assets, and the federal government will support the necessary permits and approvals.