Japan’s $36 billion commitment to American energy and critical mineral projects across three U.S. states marks the opening phase of an unprecedented trade partnership between the two nations. This investment includes three projects—each with significant scale and strategic importance—as the initial tranche of Japan’s total $550 billion pledge for American-based projects, demonstrating Tokyo’s confidence in U.S. energy resources and production capabilities.

The centerpiece involves a $33 billion natural gas facility in Ohio designed to generate an unprecedented 9.2 gigawatts of power. The Portsmouth Powered Land Project would become “the largest natural gas generation facility in history” according to industry reports. Japan will also finance a $2.1 billion deepwater crude oil export facility off the Texas coast, projected to generate $20-30 billion annually in U.S. crude exports at full capacity. The investment package includes funding for a synthetic diamond manufacturing site in Georgia, addressing critical supply chain vulnerabilities. These projects represent Japan’s strategic involvement in strengthening U.S. energy and industrial capacity.

These projects promise to create thousands of jobs while expanding America’s energy infrastructure and export capabilities. The timing proves particularly valuable for U.S. energy production, representing a strong vote of confidence in the partnership between the two countries and underscoring the global significance of their collaboration.

Key Takeaways

Japan’s $36 billion commitment to U.S. energy projects represents a significant milestone in bilateral trade relations between the two countries, strengthening America’s energy infrastructure while generating substantial employment opportunities and addressing supply chain dependencies.

• The two countries’ collaboration through Japan’s $36 billion investment initiates an unprecedented $550 billion commitment extending through 2029, targeting strategic U.S. energy and manufacturing assets

• Ohio’s $33 billion natural gas facility will generate record 9.2 gigawatts of power, sufficient to supply 7.4 million American homes

• Texas deepwater crude oil terminal receives $2.1 billion investment with potential to generate $20-30 billion in annual U.S. export revenues

• Georgia synthetic diamond manufacturing facility eliminates U.S. dependence on Chinese supplies for critical semiconductor and industrial applications

• Profit distribution structure awards 90% of returns to the United States following Japan’s initial cost recovery period

If Japan fails to fund or follow through on selected projects, the U.S. has the right to claw back revenues or reimpose higher tariffs.

This strategic alliance between the two countries reinforces America’s position by strengthening U.S. energy and industrial leadership. It also supports the U.S.’s ambitions as the world’s leading energy supplier, further solidifying its role in global energy markets while meeting critical infrastructure demands from expanding AI data centers and industrial operations.

Trump Announces Japan’s $36 Billion Investment Commitment

President Donald Trump officially revealed the first tranche of Japanese investments in the United States, announcing commitments totaling $36 billion for three strategic projects across Ohio, Texas, and Georgia. The White House also released an official statement underscoring the significance of this agreement and the government’s involvement. The announcement was further highlighted in a social media post by President Trump, emphasizing the importance of the investment and the strengthened economic partnership. This initial phase establishes the foundation for a groundbreaking economic partnership that delivers substantial advantages for the American oil and gas sector.

Historic Trade Deal Context

The investment announcement flows from a landmark framework agreement established on July 22, 2025, creating the foundation for a new era in U.S.-Japan trade relations. This historic deal operates on principles of reciprocity and shared national interests, designed to level the playing field for American producers. The Japanese government committed to invest $550 billion in the United States—unlike any previous trade agreement in American history—with projects specifically selected by the U.S. government.

Commerce Secretary Howard Lutnick and Japan’s Economic Revitalization Minister Ryosei Akazawa formalized these arrangements on September 4 through a seven-page memorandum of understanding regarding Japan’s investment program. The agreement targets reducing the U.S. trade deficit, strengthening the American manufacturing and defense industrial base, and securing long-term prosperity.

Tariff Reduction Agreement

The Trump administration agreed to reduce tariffs on Japanese imports from 25% to 15% in exchange for Japan’s investment commitments. The tariff framework incorporates the Most Favored Nation rate for Japanese products and applies retroactively to August 7. The agreement specifically reduces U.S. tariffs on Japanese automobiles and parts from 25% to 15%.

“The scale of these projects are so large, and could not be done without one very special word, TARIFFS,” Trump emphasized during his announcement. Certain civil aircraft and parts falling under the World Trade Organization’s Agreement on Trade in Civil Aircraft received exemptions from reciprocal tariffs and Section 232 tariffs on steel, aluminum, and copper.

The agreement also includes Japanese commitments to purchase $8 billion annually in U.S. agricultural products and $7 billion yearly in energy products. Japanese negotiators secured guarantees that for any future Section 232 tariffs imposed on pharmaceuticals and semiconductors, Japan would receive rates no greater than those applied to any other country.

Japan’s $550 Billion Pledge Timeline

Japan’s investment package spans from 2025 through 2029, with all investments required before the end of Trump’s current term. Projects are recommended by an investment committee chaired by Commerce Secretary Lutnick before receiving presidential approval. Once approved, funds must be transferred “no less than” 45 business days after Japan receives notification.

Prime Minister Sanae Takaichi expressed support for the initiative, stating it aligns with objectives of “promoting mutual benefits between Japan and the United States, ensuring economic security, and fostering economic growth”. Economic Revitalization Minister Akazawa confirmed that Japan would continue working with the U.S. on additional investment deals, noting that Tokyo has pledged investments of up to $550 billion before Trump’s term concludes.

Japanese officials indicated that only 1-2% of the $550 billion would be actual capital, with the remainder comprising bonds and loans from the Japan Bank for International Cooperation and credits with public guarantees. These investments are expected to generate hundreds of thousands of American jobs while expanding domestic manufacturing capabilities.

Japanese officials are considering announcing several additional investments during Prime Minister Takaichi’s scheduled visit to the United States in March. These forthcoming announcements continue what Trump described as a “HISTORIC” trade partnership designed to revitalize the American industrial base.

Ohio Secures $33 Billion Natural Gas Power Plant

“The Portsmouth, Ohio power plant, valued at $33 billion, would be the largest natural gas-fired generating facility in U.S. history, generating 9.2 gigawatts of electricity annually, more than enough to power all of the homes in Ohio. The facility is designed to provide reliable baseload power for the region, supporting continuous electricity demand for industries and data centers.” — Howard Lutnick, U.S. Commerce Secretary

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“The Portsmouth, Ohio power plant, valued at $33 billion, would be the largest natural gas-fired generating facility in U.S. history, generating 9.2 gigawatts of electricity annually, more than enough to power all of the homes in Ohio.” — Howard Lutnick, U.S. Commerce Secretary

Japan’s most substantial single investment targets a massive natural gas power facility near Portsmouth, Ohio, carrying a $33 billion price tag. This project alone represents the lion’s share of the broader $36 billion commitment, positioning Ohio as a critical hub for America’s next-generation energy infrastructure. The plant’s large-scale power generation will play a key role in boosting grid reliability and meeting the growing energy needs of American manufacturing and industry.

SoftBank’s SB Energy to Operate Facility

SB Energy, operating under the SoftBank Group Corp. umbrella, will spearhead development and operations for this landmark energy venture. The Commerce Department characterizes the Portsmouth Powered Land Project as “a strategic initiative to create an integrated platform capable of supplying reliable, large-scale, dispatchable energy”.

This marks SoftBank’s most ambitious foray into American energy infrastructure, extending well beyond their traditional technology investments. The project signals how major Japanese corporations view the U.S. oil and gas sector—not merely as an investment opportunity, but as essential infrastructure supporting America’s industrial future.

Record-Breaking 9.2 Gigawatts Generation Capacity

What does 9.2 gigawatts actually mean for American energy production? Once operational, the Portsmouth facility will generate unprecedented power output, claiming the title of world’s largest natural gas generation project. The scale dwarfs Florida Power & Light’s West County Energy Center, currently America’s largest at 3.7 gigawatts. Ohio’s new facility would rival Dubai’s Jebel Ali facility at 9.547 gigawatts, currently holding the global record.

Commerce Secretary Howard Lutnick described the project as “the largest natural gas-fired generating facility in history”. The plant’s output equals approximately nine traditional nuclear reactors, providing electricity for roughly 7.4 million homes across the PJM Interconnection grid.

Addressing Critical Infrastructure Demands

The Portsmouth facility addresses rapidly escalating power demands, particularly from data centers supporting artificial intelligence applications. The International Energy Agency projects data centers will double their energy consumption by 2030, with America accounting for the largest share of this projected increase. These facilities are expected to consume more electricity than steel, cement, and chemical industries combined by decade’s end.

Ohio already hosts 192 data centers—ranking fourth nationally and exceeding Pennsylvania, Michigan, and Indiana combined. The Trump administration recognizes that accelerating large-scale power plant construction is essential for managing rising electricity costs amid soaring demand from data centers, manufacturing facilities, and increasing electrification.

The Portsmouth project directly addresses critical infrastructure gaps as PJM Interconnection and state leaders work to balance supply and demand pressures from the expanding data center sector.

Texas and Georgia Projects Strengthen U.S. Supply Chains

“The third major project in Georgia was a synthetic industrial diamond manufacturing plant that would satisfy 100% of U.S. demand for synthetic diamond grit, a critical input for advanced manufacturing and semiconductor production. This plant will significantly reduce U.S. dependence on foreign sources, particularly China, for critical materials.” — Howard Lutnick, U.S. Commerce Secretary

The remaining $3 billion in Japanese investment targets strategic infrastructure projects in Texas and Georgia, both designed to address critical vulnerabilities in America’s oil and gas supply chains. The Texas project will increase U.S. export capacity and help secure export capacity for crude oil and natural gas, reinforcing America’s position as a leading energy supplier.

Texas GulfLink Deepwater Oil Export Terminal

Japan’s $2.1 billion commitment to the Texas GulfLink deepwater crude oil export terminal positions this facility as a game-changer for American energy exports. Located 30 miles off Brazoria County’s coast, the terminal eliminates current inefficiencies by enabling direct loading of Very Large Crude Carriers (VLCCs), removing the costly “reverse lightering” process.

The terminal’s strategic value becomes clear when considering its export potential—between $20-30 billion annually in U.S. crude exports at full capacity. The U.S. Transportation Department’s recent license approval earlier this month cleared the final regulatory hurdle. Commerce Secretary Lutnick highlighted how this infrastructure will “reinforce America’s position as the world’s leading energy supplier”.

Several major Japanese firms have already signaled participation interest, including Mitsui O.S.K. Lines, Nippon Steel, JFE Holdings, and Modec. Their involvement demonstrates the project’s appeal to established energy sector players seeking to capitalize on America’s growing export capabilities.

Georgia’s Synthetic Diamond Manufacturing Plant

The $600 million synthetic diamond manufacturing facility in Georgia tackles a different but equally important supply chain challenge. Operated by Element Six, a De Beers Group subsidiary and the world’s largest diamond producer[123], this high-pressure, high-temperature facility aims to meet 100% of domestic demand for synthetic diamond grit.

Addressing Critical Supply Dependencies

American industry currently depends heavily on Chinese suppliers for synthetic diamonds, creating vulnerabilities across semiconductor, automotive, and oil and gas sectors. This dependency poses risks that Commerce Secretary Lutnick addressed directly: “We will no longer rely on foreign supply for this essential material”.

Japanese diamond toolmakers Asahi Diamond Industrial and Noritake have expressed purchasing commitments for the facility’s output, indicating strong market demand for domestically produced synthetic diamonds.

Financial Structure Benefits American Industry

The profit-sharing arrangement reflects Japan’s role as capital provider while ensuring long-term American benefits. Japan recovers initial investments first, then profits split 90-10 favoring the United States. Commerce Secretary Lutnick explained the structure: “Japan is providing the capital. The infrastructure is being built in the United States. The proceeds are structured so Japan earns its return, and America gains strategic assets, expanded industrial capacity, and strengthened energy dominance”.

Economic Revitalization Minister Akazawa noted these projects create opportunities for smaller manufacturers throughout the supply chains, not just major Japanese corporations.

How Japan-U.S. Strategic Partnership Reshapes Global Trade

The strategic alignment between Japan and the United States extends far beyond these initial projects, representing a fundamental shift in bilateral economic relations with global implications. This historic partnership reflects a comprehensive approach to shared economic security and industrial resilience that could redefine international trade dynamics.

Prime Minister Takaichi’s Role in Alliance

Prime Minister Sanae Takaichi has positioned herself as a staunch advocate for strengthened U.S.-Japan cooperation, emblazoning her tenure with the brand “Japan is Back”. Her upcoming March 2026 visit to Washington will serve as a platform to reaffirm this “unwavering alliance”. Takaichi faces the delicate task of balancing national interests with alliance commitments, especially regarding the profit structure of investments that some Japanese analysts have termed “extremely unequal”.

Economic Security Through Joint Ventures

The partnership explicitly targets economic security concerns, with both nations establishing a framework for “Securing the Supply of Critical Minerals and Rare Earths through Mining and Processing”. This cooperation aims to counter what experts identify as “China’s unremitting use of innovation mercantilism and economic coercion”. Moreover, the allies are creating a U.S.-Japan Critical Minerals Supply Security Rapid Response Group to address supply vulnerabilities.

Profit-Sharing Structure Explained

Under the agreement, profits are split with 90% going to the United States and 10% to Japan “based on the respective levels of contribution and risk”. However, economic analysis suggests Japan could potentially incur net losses between $127.3-191.3 billion in present value terms. Japan’s commitment resembles a structured loan rather than an equity investment.

Multiple Japanese Firms Join Initiative

SoftBank Group, Toshiba, and Hitachi headline approximately 10-12 Japanese companies exploring these investment opportunities. These enterprises will receive investment and loan guarantees from the Japan Bank for International Cooperation and Nippon Export and Investment Insurance. Japan’s Economy Minister confirmed that smaller manufacturers throughout the supply chains will also benefit from these partnerships.

Oil and Gas Sector Outlook Following Historic Agreement

Japanese energy companies are expanding their American operations at an unprecedented pace, creating substantial opportunities for U.S. oil and gas producers following the $36 billion investment announcement.

Wave of Japanese Energy Investments Already Underway

The agreement represents just the beginning of Japan’s commitment to American energy assets. Mitsubishi recently completed its $5.20 billion acquisition of Haynesville Basin producer Aethon Energy (plus $2.33 billion in assumed debt). Tokyo Gas has earmarked at least half of its $2.30 billion overseas investment budget for U.S. projects, while JAPEX has deployed $1.30 billion across Colorado and Wyoming oil and gas assets. Japan’s largest power producer, Jera, invested $1.50 billion in Haynesville Basin operations.

Downstream Infrastructure Creates Export Opportunities

The Texas GulfLink deepwater terminal exemplifies how these investments benefit downstream operations, with potential to generate $20-30 billion annually in crude exports. Japanese companies recognize the strategic value of controlling energy supply chains rather than remaining passive buyers. As one industry analyst observed, “Japanese companies that will increasingly depend on U.S. LNG want to be active rather than passive players in helping to control price risks”.

Additional Announcements Expected

Prime Minister Takaichi’s scheduled March visit will likely bring more investment announcements. Energy ranks among seven priority sectors within Japan’s broader $550 billion commitment. Japan’s recently released Seventh Strategic Energy Plan specifically endorses upstream involvement in oil and gas development.

Energy Independence Goals Drive Investment Strategy

Japan targets increasing its “independent development ratio of oil and natural gas to 50 percent or more by 2030 and 60 percent or more by 2040”. For American producers, this capital influx reinforces the nation’s position “as the world’s leading energy supplier” while the U.S. prepares to supply one-third of global LNG volumes by the early 2030s.

Conclusion

This landmark $36 billion investment from Japan represents a transformative shift in US-Japan economic relations, fundamentally reshaping the American oil and gas landscape. The Portsmouth natural gas facility in Ohio stands as the centerpiece, poised to generate an unprecedented 9.2 gigawatts of power while addressing critical energy demands from the rapidly expanding data center industry. Meanwhile, the Texas GulfLink deepwater terminal will significantly boost US crude export capabilities, potentially generating $20-30 billion annually. Additionally, the Georgia synthetic diamond manufacturing plant addresses a crucial vulnerability by eliminating dependence on Chinese supplies for this essential industrial material.

Rather than a typical investment arrangement, the profit-sharing structure grants Japan returns until costs are recouped, after which profits split 90-10 favoring the United States. Though some Japanese analysts view these terms as potentially unfavorable, Prime Minister Takaichi continues championing strengthened bilateral cooperation under her “Japan is Back” platform. Major Japanese firms like SoftBank, Toshiba, and Hitachi lead approximately a dozen companies exploring these opportunities, backed by investment guarantees from Japanese financial institutions.

The first $36 billion merely initiates the broader $550 billion commitment spanning through 2029, with additional announcements expected during Prime Minister Takaichi’s March visit. Both nations clearly recognize how this partnership addresses mutual concerns regarding economic security and industrial resilience. US energy producers therefore stand to benefit substantially as Japanese firms increase their American market presence, exemplified by recent acquisitions like Mitsubishi’s $5.20 billion purchase of Aethon Energy.

Japan ultimately aims to increase its independent development ratio of oil and natural gas to 60 percent or more by 2040, while the United States strengthens its position as the world’s leading energy supplier. This historic agreement thus creates thousands of American jobs, expands domestic manufacturing capabilities, and secures long-term prosperity through strategic infrastructure development. The foundation has certainly been laid for a new era in US-Japan trade relations grounded in reciprocity and shared national interests.

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