Japan has committed to invest approximately $36bn in US oil, gas and critical mineral projects, as part of a broader trade agreement between President Donald Trump and Prime Minister Sanae Takaichi. The first wave of investments includes a natural gas-fired power plant in Ohio, a deepwater crude oil export facility off Texas, and a synthetic diamond manufacturing site in Georgia.
The Ohio plant, operated by SoftBank subsidiary SB Energy, will generate 9.2 GW of electricity and is described by the Trump administration as the largest such facility in US history. The diamond plant, valued at $600m, aims to end US reliance on foreign sources for synthetic diamond grit, a critical material for semiconductors. “We will no longer rely on foreign supply for this essential material,” said Commerce Secretary Howard Lutnick.
Trump credited his tariff strategy for enabling the scale of the projects, though economists have warned it risks fuelling inflation. The deal builds on a $550bn investment pledge from Japan last year, in exchange for reduced US tariffs on Japanese cars. Trump’s social media post declared: “Our massive trade deal with Japan has just launched.”
The announcements come amid heightened tensions between Japan and China over Taiwan. Takaichi said the projects would enhance “Japanese and US economic security”, without directly naming China. Beijing has recently restricted some rare earth exports to Japan, leveraging its dominance in critical minerals that are vital for industries from oil refining to car manufacturing.
Despite the diplomatic strains, Japan reported a nearly 17% rise in exports in January, driven partly by increased shipments to China. The US-Japan projects mark a strategic effort to reduce dependence on Chinese supply chains for energy and critical materials.
