Japan's $550 Billion Investment in US Infrastructure

According to a October 28 report by Nikkei, US Secretary of Commerce, who is currently visiting Japan, stated in an exclusive interview with Nikkei on the 27th that the agreed $550 billion US investment and financing framework will "focus on risk-free infrastructure areas such as power generation and energy pipelines." He revealed that 10 to 12 Japanese companies, including power and shipbuilding firms, are studying specific investment plans for the US, with the first project expected to be finalized by the end of the year.

Regarding the specific use of the $550 billion from Japan, the Secretary disclosed: "This is a joint investment aimed at ensuring the economic security of both Japan and the United States. The first project will come from the power sector." Given the expansion of data centers, US electricity demand is strong, and Japanese companies will provide equipment such as gas turbines to enhance US power generation capacity.

The Secretary also mentioned that a liquefied natural gas (LNG) project is under consideration, and Japan's participation will contribute to energy self-reliance. He further indicated that more than half of the $550 billion might be allocated to the power and energy sectors.

Some Japanese companies considering investment in the US are concerned about work visa issues, as the Trump administration is tightening work visa rules. However, the Secretary stated: "We will request Japanese companies to submit a list of employees responsible for building factories in the US or training American personnel, and the Commerce Department will be responsible for issuing visas."

In addition to reciprocal tariffs, the US Commerce Department is considering introducing "sector-specific tariffs." Nevertheless, the Secretary made clear that even if sector-specific tariffs are implemented, "the tariff rates for Japanese-made semiconductors and pharmaceuticals will remain at 15%."