‘Let’s call it seed money’: Donald Trump says Japan to invest $550 billion in US to lower tariffs — but deal still unclear – Times of India

President Donald Trump claims that Japan has committed $550 billion for US investments under a new trade framework, though the figure remains under negotiation and far from confirmed.“Japan is putting up $550 billion in order to lower their tariffs a little bit,” Trump said on Thursday, further adding that, “They put up, as you could call it, seed money. Let’s call it seed money.”According to Trump, the US would receive 90% of profits from these investments, despite Japan providing the capital. He described it as a “signing bonus” linked to reducing threatened tariffs from 25% to 15%, including automotive sectors.A White House source, told the Associated Press that terms remain under discussion without formal documentation. They suggested the intended $550 billion fund would make investments under Trump’s guidance.This amount is considerable, representing over 10% of Japan’s GDP. The Japan External Trade Organisation reports direct US investments reached $780 billion in 2023. The extent to which the $550 billion represents fresh investment versus existing plans remains unclear.The trade framework announced Tuesday has provided the Trump administration with significant discussion points.Trump states he has attracted trillions in new US investments, though economic indicators haven’t yet reflected these commitments in employment, construction or manufacturing figures. The framework allows Trump to demonstrate other nations accepting goods taxation, although US consumers may ultimately bear some costs.Regarding the $550 billion, Japan’s Cabinet Office confirmed it involves state-affiliated financial institutions’ credit facilities, including Japan Bank for International Cooperation. Additional details to be finalised as investment talks progress.Japanese trade negotiator Ryosei Akazawa, refrained from elaborating on the $550 billion investment details. “If we find differences of understanding, we may have to point them out and say that’s not what we discussed,'” Akazawa said.Meanwhile, the US reportedly released its version of the deal while Japanese officials were still on their flight back.The US administration detailed that the investment would span across sectors including critical minerals, pharmaceuticals, computer chips and shipbuilding. Additionally, they stated Japan would purchase 100 Boeing aircraft and US-grown rice within this framework. Treasury Secretary Scott Bessent indicated quarterly evaluations would occur.“And if the president is unhappy, then they will boomerang back to the 25 per cent tariff rates, both on cars and the rest of their products. And I can tell you that I think at 25, especially in cars, the Japanese economy doesn’t work,” Bessent told Fox News.Akazawa denied Bessent’s statement about quarterly reviews being part of the negotiations, saying that, “In my past eight trips to the United States during which I held talks with the president and the ministers. I have no recollection of discussing how we ensure the implementation of the latest agreement between Japan and the United States.”He expressed concerns about significant economic and administrative disruptions if rates increase to 25 per cent on August 1 before decreasing to 15 per cent. He stated, “We definitely want to avoid that and I believe that is the understanding shared by the US side.”Regarding US rice imports, Japanese officials maintained their position on the existing 770,000-ton “minimum access” limit. Agricultural minister Shinjiro Koizumi clarified that Japan would independently determine any increase in US rice imports, without commitment to a specific quota.Commerce secretary Howard Lutnick said Japan’s deal could prompt other countries, like South Korea, to start trade talks with the US.Meanwhile, Trump, currently in Scotland, is expected to meet European Commission President Ursula von der Leyen on Sunday to discuss trade.