TMTPOST -- Details of   a   trade   agreement released by the White House show the Japanese   government   has made   a   staggering   commitment to invest   hundreds of billions of    dollars and concessions on certain sectors such as the auto   industry in   exchange for a relatively lower reciprocal   tariff   rate.

Credit：Tasnim

U.S. President Donald Trump on Tuesday announced a "massive"   trade deal with Japan, involving $550 billion in investments and a 15% reciprocal tariff on Japanese goods.   White House press secretary Karoline Leavitt on Wednesday described the investment as the "centerpiece" of the trade deal with Japan.

In a   fact sheet released on   Wednesday, the White House called   the deal an   "unprecedented U.S. – Japan strategic trade and investment agreement",   and   confirmed the $550 billion investment commitment from Japan,   "the single largest foreign investment commitment ever secured   by any country."

"With over   $550 billion in a new Japanese/USA investment   vehicle and enhanced access for American exports, this agreement marks a new chapter in bilateral cooperation — one that will unleash the full potential of the U.S. economy, strengthen vital supply chains, and support American workers, communities, and businesses for decades to come,"   said   the fact sheet.  

The fact sheet showcased how the Trump administration plans to take advantage of $550 billion investment commitment from Japan to rebuild and expand   core U.S. industries.   It said these funds, at   Trump ’ s direction,   will be targeted toward the revitalization of America ’ s strategic industrial base, including   energy infrastructure and production, semiconductor manufacturing and research, critical minerals mining, processing, and refining, pharmaceutical and medical production, and commercial and defense shipbuilding.

Trump   in his social media post said "Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.   "   The White   House in the fact   sheet   confirmed Japan would leave   most   of the investment income   to   the   U.S. The United States will retain 90% of the profits from this investment — ensuring that American workers, taxpayers, and communities reap the overwhelming share of the benefit,   according to the fact sheet.  

Japanese Prime Minister Shigeru Ishiba   on Wednesday confirmed   the agreement   to set tariffs   at 15%,   including   the exsiting rate. He told reporters   that the 15% rate was the lowest so far among countries that   have   a   trade surplus   with the U.S., thus   "   we   have   achieved   the greatest results."   Ishiba   said Japan ’ s auto exports to U.S. will face a 15% tariff rate, down from the current 25% levied across countries, according to Reuters.

  As part of the   agreement, imports from Japan will be subject to a baseline 15% tariff rate, according to   the fact sheet from   the   White House, without listing the current sectoral   tariffs   that   would be adjusted under the agreement. In addition to the 10% worldwide baseline tariffs, Japan now faces a 25% U.S.-imposed tariff on automobiles and auto parts, and a 50% tariff on steel and aluminum.

Trump   in   his post on Tuesday   said   what   seems to be   most   important   that the   deal   brings about is   that   Japan will open up its market to U.S. cars   and agricultural   products   including the rice.   The White House in its fact sheet   claimed the agreement delivers "breakthrough openings"   across key sectors.

In   agriculture   and food,   Japan under the deal will   increase imports of U.S. rice by 75%   and purchase $8 billion in U.S. goods, including corn, soybeans, fertilizer, bioethanol, and sustainable aviation fuel,   per the fact sheet. It   said U.S.   will massively expand   energy exports to Japan,   without provide   any numbers   to quantify   the   expansion.   As part of   cooperation   in energy,   both   countries    are exploring a new offtake agreement for Alaskan liquefied natural gas ( LNG ) .  

To promote   American   manufacturing   and aerospace, Japan has committed to purchase U.S.-made commercial aircraft, including an agreement to buy 100 Boeing aircraft.   Japan will   also purchase   additional   billions of dollars   worth   of U.S. defense equipment   annually   to   enhance   interoperability and alliance security in the Indo-Pacific.

To improve imports   of U.S. automobiles,   Japan   will lift   longstanding   restrictions on U.S. cars and trucks, granting   U.S. automakers access to the Japanese consumer market. The Asian ally will for   the first time approve U.S.   automotive standards. It also   vows to grant   broader   openings   for a range of industrial and consumers goods, leveling the playing field for American producers.