Japan says profits from US investments in trade deal to be shared according to contributions

TOKYO: Japan's government said on Friday that profits from a $550 billion investment package agreed in this week's tariff deal with the U.S. would be split between Japan and the U.S. according to the degree of contributions by each side.

AI Brief

Japan will invest $550B in the US in exchange for lower tariffs on exports like cars.
The US will retain 90% of the profits, with Japan receiving 10%, based on risk and contribution.
Japan's investment will support resilient supply chains in key sectors like semiconductors and pharmaceuticals.

The comment from a Japanese government official suggests the investment scheme would involve substantial contributions not just from Japan but also from the U.S. government or companies, though the structure of the scheme remains largely unclear.

The White House said earlier this week the U.S. would retain 90% of the profits from the $550 billion U.S.-bound investment and loans that Japan would make in exchange for lower tariffs on auto and other exports to the U.S.

The official told a briefing that resulting returns will be split 10% for Japan and 90% for the U.S. "based on the respective levels of contribution and risk borne by each side."

Japan has said the U.S. investment package includes loans and guarantees from state-owned Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI), to enable Japanese firms to build resilient supply chains in key sectors such as pharmaceuticals and semiconductors.

A law revision in 2023 has expanded the scope of JBIC, making foreign companies key to Japan's supply chains eligible for loans from the bank.