US-Japan trade deal may already be under pressure, as reports on 15th July suggest the two sides disagree on how to split profits from Japan's $550 billion investment into the US.
on 22nd July, Trump announced the deal,which includes a 15% tariff on imported goods and a $550 billion Japanese investment. However, the sides do not seem aligned on profit sharing, with Japan seeking a split based on contributions, while the US says it would keep 90%.
US commerce secretary Howard Lutnick boasted on Wednesday that Japan would be “the banker” for $550bn worth of investments in US strategic sectors such as semiconductors, shipbuilding and critical minerals, in return for the reduction in tariffs.
“The Japanese will finance the project. We will give it to an operator and the profits will be split 90 per cent to the taxpayers and 10 per cent to the Japanese. They basically bought down their tariff rate by this commitment,” said Lutnick.
On 23rd July, Trump said the $550bn was a “signing bonus” to the US. “What Japan did is they brought down their tariffs,” Trump told reporters. “They gave us $550bn upfront, 100 per cent. We get 90 per cent, they get 10 per cent.”
On 25th July, a slideshow issued by Japan’s Cabinet Office appeared to contradict Lutnick by saying the ratio of profit distribution would be “based on the degree of contribution and risk taken by each party”.
Officials familiar with the US-Japan talks said the deal was pulled together in a slapdash manner during a 70-minute meeting between Japan’s chief negotiator Ryosei Akazawa and Trump on 22nd July…..
