Japan, US advance $550B investment pact with AI, chips in focus

Japan is making progress on a $550 billion investment initiative with the United States, with artificial intelligence and semiconductor projects expected to play a central role in the next phase of the agreement, Report informs via Bloomberg.

Trade Minister Ryosei Akazawa said the two countries will continue working closely to implement the investment vehicle, following meetings in Washington with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer.

Akazawa declined to provide details on a third tranche of projects under the pact. He said discussions surrounding AI and chips will carry "very significant weight" as both governments prioritize investments that deliver mutual economic benefits.

The $550 billion fund was established as a key pillar of last year's US-Japan trade agreement. In exchange, the Trump administration agreed to cap tariffs on Japanese goods at 15% and reduce duties on automobiles, a sector that remains critical to Japan's export-driven economy.

The first round of projects committed $36 billion to US oil, gas and critical minerals, including development of a natural gas facility in Ohio.

A second package expanded the initiative with $73 billion earmarked for nuclear power projects across Tennessee and Alabama, alongside natural gas power plants in Pennsylvania and Texas.

Akazawa also said both sides confirmed that no additional tariffs would be imposed on Japan beyond the terms of last year's agreement, providing greater certainty for Japanese manufacturers and investors.