The United States and Japan will announce details of their trade deal later this week, a pact that calls on the Japanese government to make $550 billion in investment available to be directed by President Trump, Commerce Secretary Howard Lutnick said on Monday.
Japan agreed to the investment, which it said will be financed through government-backed loans and guarantees, as part of a trade deal it reached with the United States last month. In exchange, the Trump administration agreed to a 15 percent tariff on Japanese imports, a rate lower than it had previously threatened to impose.
Mr. Lutnick, speaking on Fox News, said the agreement will call for the Japanese money to be “at the hand of Donald Trump and he can go invest it” in areas that are important to American economic security such as rare earth minerals, semiconductors and antibiotic drugs.
The comments by Mr. Lutnick reiterated the Trump administration’s claim that it will have final say over what kind of projects Japan’s pledged spending will fund. Mr. Trump has also said that the United States would receive virtually all the profits from those investments.
But Japanese officials have stressed that the investments in the United States would be determined by whether they also benefit Japan. They also maintain that profits are to be allocated according to each side’s committed risk and financial contribution.
Neither government has released documents detailing what they agreed to last month, leaving each side to offer, on certain points, different public explanations of what they agreed to.
The divergence underscores the continuing uncertainty raised by the rollout of Mr. Trump’s trade agenda, which aims to induce companies to return manufacturing to the United States. After raising U.S. tariffs to their highest level in a century, Mr. Trump said he would negotiate individual pacts with dozens of countries. He has so far announced deals with a handful of trading partners, including Japan, South Korea and the European Union. Most remain handshake agreements.
Last week, the Trump administration and European Union released the terms of their agreement. Yet the announcement highlighted major areas of unfinished business, like making the reduction of auto tariffs to 15 percent from 27.5 percent contingent on the E.U. taking steps to slash many of its tariffs on American goods.
Mr. Trump met with South Korean President Lee Jae Myung at the White House on Monday, but the meeting did little to ease existing concerns about the verbal deal the countries had reached weeks earlier. That agreement, like the one reached with Japan and the European Union, would set most tariffs at 15 percent.
A key remaining sticking point for South Korea and Japan is when the tariffs on cars and auto parts will be lowered to the 15 percent rate that they, like the European Union, negotiated in their respective trade agreements.
Cars and auto parts are by far the Asian nations’ biggest export to the United States. The levies have been costing their automakers billions in profits, and industry experts say they could have a devastating effect on the smaller parts suppliers that form the backbone of their manufacturing industries.
Japan’s top trade negotiator, Ryosei Akazawa, declined to comment on Mr. Lutnick’s remarks at a news briefing in Tokyo on Tuesday. He added that the timing of his next U.S. trip had not been decided. Mr. Akazawa said that Tokyo was continuing to “strongly urge in every way possible” that the Trump administration take immediate steps to lower tariffs on automobiles and auto parts.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
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