Howard Lutnick, the Commerce Secretary, has announced that the U.S. will share the profits from projects funded by Japan through the new tariff deal.
Japanese Taxpayers Won't Bear Long-Term Project Cost
Lutnick stated that the U.S. will divide the profits equally from projects funded by Japan’s investment until the initial investment is recovered, CNBC reported. Once Japan recoups its $550 billion, the profit split will shift to 90% for the U.S. and 10% for Japan.
"After that, it's 90/10, in favor of America," Lutnick suggests.
The U.S. and Japan recently finalized a deal, with Japan agreeing to invest $550 billion in American projects handpicked by the U.S. government. In return, Japan will face a 15% baseline tariff and sector-specific levies. The U.S. will use the funds to support domestic manufacturing, including projects like nuclear power plants and antibiotic production.
Lutnick assured that the investment won't burden Japanese taxpayers over time and that Japanese consumers will enjoy lower tariff rates. The U.S. will employ construction workers for the projects and issue a “capital call” to Japan, which will have to borrow funds to finance them.
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This development comes after a series of trade negotiations between the U.S. and Japan. Earlier in September, the U.S. reduced tariffs on Japanese goods, including automobiles and auto parts, following a $550 billion trade deal. This move was confirmed by Japan’s tariff negotiator Ryosei Akazawa, resolving uncertainty over the implementation timing for the trade deal.
Before that, in August, the U.S. pledged to rectify a “regrettable” error in a presidential executive order, which would result in the removal of overlapping tariffs on Japanese goods. This decision was announced by Akazawa, Tokyo’s trade negotiator, following discussions in Washington.
Notably, the agreement arrives amid legal uncertainty over many of Trump’s tariffs, with the Supreme Court set to hear an appeal on a lower court ruling that declared many of the president’s most severe levies illegal.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
