Earlier this month, Donald Trump, the US’s lead negotiator, trumpeted a “massive” trade deal with Japan. He announced this on his Truth Social platform. The deal only raises the tariff rate to 15 percent. It represents the first major departure from the U.S.-Japan economic relationship. In his speech announcing it, Trump hailed the agreement as unprecedented, asserting it will produce “Hundreds of Thousands of New Jobs.”
The news came on the heels of intense negotiations between Trump, a Japanese trade delegation and senior White House officials in the Oval Office. Despite these overstatements, the most important thing that Trump mentioned was Japan investing $550 billion into the United States. He stated, “Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.”
It is the details of this investment plan that have caused officials to cry foul. Japanese leaders see that $550 billion number as a cap because it includes government loan guarantees. Trump’s picture is a lot sunnier.
As negotiations continued, the White House established a “big board” in the Oval Office to sketch out these financial commitments. Originally set at $400 billion, it was eventually changed to $500 billion. The numeral “4” was crossed out, with “500” written above it.
To date it is not even known if this mismatch was the outcome of late Trump-directed negotiations, typos or something else. Andy Laperriere noted that Japanese officials are framing the investment plan differently than how it has been presented by the U.S. administration.
While it’s easy to forget, Trump’s first such announcement was on the reciprocal tariff arrangement. “Japan will pay Reciprocal Tariffs to the United States of 15%,” he stated. This would nonetheless be a huge advance in U.S.-China trade relations. Both sides are making great efforts to harmonise tariffs and investments.
Howard Lutnick, one of the key players in the talks, noted President Trump’s hand in negotiating the agreement. “The answer is: the negotiator in chief of the United States of America is sitting behind the desk. And Donald Trump is sitting there negotiating the final deal,” he said. Lutnick claimed ownership of the big board where key figures were displayed: I built the large board and installed it there.
Though many are celebrating the agreement’s transformative promise, the jury is still out for some analysts. As Scott Bessent said, “Now that is a different type of deal.” He raised issues with whether the agreement will be enforced well enough at the ground level.