The Trump administration and Japan reached a deal on rare earth minerals on Tuesday and unveiled a list of projects included in a $550 billion investment proposal stemming from a July trade agreement.
The rare earth deal, which President Donald Trump signed alongside Japanese Prime Minister Sanae Takaichi, establishes a mutual stockpiling arrangement and stipulates that the United States and Japan will cooperate with international partners to protect the supply chain, Reuters reported. Trump has been pushing to better secure the rare-earth supply chain and cut into China’s stranglehold over rare-earth minerals.
Along with the rare-earth deal, the United States and Japan released a list of proposed projects to boost Japanese investment in the U.S. economy. Commerce Secretary Howard Lutnick said at a press conference alongside Trump on Tuesday that the proposals “are driven by the Japanese strategic investment initiative, which was created by [Trump’s] tariff policy and by [Trump’s] historic trade agreement with Japan.”
Lutnick added that the initial investment totals $490 billion, which he called the “launch phase,” Bloomberg reported. After the “launch phase,” more projects would then be considered for the total $550 billion project. The proposed Japanese investments were a key part of the U.S.-Japan trade deal agreed upon in July, when President Trump lowered tariffs on Japanese auto imports from 27.5% to 15%, and in exchange, Japan agreed to invest $550 billion in the United States.
The two allies announced numerous investment projects spanning energy and critical minerals, as well as artificial intelligence development. Among the proposed projects is a plan to invest up to $100 billion for the construction of nuclear reactors and small modular reactors in the United States. That proposal would involve the American manufacturing company Westinghouse and include the “involvement of Japanese suppliers and operators, such as Mitsubishi, Heavy Industries, Toshiba Group, and IHI,” according to a Japanese government handout. Another $100 billion energy proposal would build more small modular reactors in the United States with some investment from Japanese companies.
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“These are great companies, many of them household names — that you would expect — that are going to build infrastructure and improve the national economic security of the United States,” said Lutnick.
President Trump also said that Toyota planned to invest more than $10 billion in U.S. auto plants. During a speech to U.S. troops in Japan, Trump said, “I was just told by the prime minister that Toyota is going to be putting auto plants all over the United States to the tune of over $10 billion.”
“And that’s a lot to do with because we have all the AI plants, we have so many things happening in the United States,” Trump added. “And it’s because of November 5th election day, but it’s also because of tariffs.”
The Toyota investment was not mentioned in the government fact sheet released on Tuesday.
Other investment proposals mentioned included a $30 billion proposal for Mitsubishi Electric to supply generators, transmission, and distribution systems, as well as equipment for AI data centers. A $15 million proposal included Panasonic supplying “energy storage systems, and other electronics, to contribute to strengthening supply chains in the U.S.”
The major U.S.-Japan announcements on Tuesday come just two days before Trump is expected to meet with Chinese Communist Party leader Xi Jinping in South Korea, a meeting Trump hopes will lead to a trade deal.
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