Lutnick: "Japan's U.S. Investment Carries Near-Zero Risk... Funds to Be Allocated to American Infrastructure"

The First Project Likely to Be in "Power" Sector
Initial Project to Be Finalized Within This Year
Visa Regulations to Be Eased... Department of Commerce to Issue Directly

On October 28, U.S. Secretary of Commerce Howard Lutnick announced that the $550 billion investment Japan has pledged to make in the United States will be allocated to American infrastructure projects such as power plants and pipelines, where the risk of loss is close to zero. The Donald Trump administration plans to finalize the first Japanese investment project in the U.S. within this year, and it is highly likely that the initial project will be in the power infrastructure sector. Additionally, to encourage Japanese companies to invest in the U.S., the government will expedite factory permitting procedures and the Department of Commerce will directly handle visa issuance for factory construction personnel.

In an exclusive interview with the Nikkei newspaper on the same day, Secretary Lutnick outlined the specific direction of the U.S.-Japan investment and financing plan agreed upon by both countries. He stated, "Funds will be allocated to infrastructure projects with minimal risk, such as power plants and pipelines," and added, "Ten to twelve major Japanese companies in the power and shipbuilding sectors have already begun reviewing investment projects in the U.S., and the first project will be decided within this year."

Although Japan and the U.S. agreed in July to establish a $550 billion investment and financing framework for the U.S., no initial project has been confirmed even after three months. Due to the unclear structure for investment and returns, many Japanese companies remain cautious about investing.

Conscious of this atmosphere, Secretary Lutnick emphasized, "The target projects will be joint investments for U.S. economic security, such as power plant construction," and "Since a consultative committee with Japanese government participation will be involved in the review from the very first stage, the projects will be jointly designed by both countries, not decided unilaterally by the U.S." He made it clear that this is a cooperative investment based on U.S.-Japan agreement, not an investment in which Japan is being led unilaterally.

According to the Japanese government, the $550 billion limit refers to the scope within which government-affiliated financial institutions, such as the Japan Bank for International Cooperation (JBIC), can provide investment, loans, and guarantees. Secretary Lutnick also stated, "This is not a case of companies investing in their own projects, but rather the Japanese government cooperating with the U.S. to invest in projects for economic security," aligning his position with the Japanese side.

He added, "The cash flow generated from the investment projects will be distributed between the two countries, so the Japanese side can fully recover both principal and interest, and there will be no burden on Japanese taxpayers." However, he drew a line by stating, "There are currently no plans to expand the $550 billion scale in the future."

Secretary Lutnick identified the power and energy sectors as the core areas for U.S.-Japan investment. He stressed, "This investment is a joint effort for the economic security of both Japan and the U.S.," and said, "The first project will likely be in the power infrastructure sector."

He also mentioned the Alaska liquefied natural gas (LNG) development project as a strong candidate for investment. He explained, "Although it is a very large-scale project, if Japan participates, it will be able to secure LNG import rights, which will help with energy self-sufficiency," and added, "It is highly likely that more than half of the total $550 billion will be invested in power and energy development."

To address concerns among Japanese companies regarding visa issues, the U.S. government also plans to ease related regulations. Secretary Lutnick stated, "If a list of employees wishing to enter the U.S. for factory construction or American training is submitted, the Department of Commerce will directly issue visas."

This measure involves transferring some of the visa issuance authority previously held by the State Department to the Department of Commerce, and is interpreted as a de facto regulatory easing to quickly support the implementation of foreign investment in the U.S. Previously, after an incident in September where employees involved in the construction of the Hyundai Motor-LG Energy Solution battery plant in Georgia were detained due to visa issues, overseas companies from countries such as South Korea and Japan have repeatedly called for improvements to the visa system.

Regarding additional tariffs by sector, Secretary Lutnick stated that the basic tariff rate for Japan would remain at 15%. The U.S. Department of Commerce is currently considering imposing additional tariffs on strategic industries such as semiconductors and pharmaceuticals, in addition to the 15% reciprocal tariff imposed globally. He emphasized, "Even if additional sectoral tariffs are introduced for Japanese semiconductors and pharmaceuticals, the rate will remain at 15%." This statement reaffirms the U.S.-Japan agreement to maintain the minimum tariff rate for semiconductors and pharmaceuticals, and is seen as a message to prevent any concerns from the Japanese side about the possibility of non-compliance with the agreement.

Finally, Secretary Lutnick also stressed the need to build a rare earth supply chain alliance. He said, "With supply chain instability increasing due to China's export restrictions, the two countries must establish a joint supply system for rare earths," suggesting that this will likely be a key agenda item at the U.S.-Japan summit scheduled for later today.

This content was produced with the assistance of AI translation services.