Japan has drawn up plans for investments in US oil, gas and critical mineral projects worth about $36 billion under the first wave of a deal with Donald Trump.
US President and Japanese Prime Minister Sane Takaichi announced a trio of projects, including a power plant in Portsmouth, Ohio, billed by the Trump administration as the largest natural gas-fired generating facility in US history.
Takaichi said the projects would strengthen his country’s ties with the United States as the diplomatic dispute between Japan and China over Taiwan’s security continues to test Japan’s economy.
Although Takaichi did not directly mention China, she expressed hope in a statement that the investments would increase the economic security of Japan and the US.
“Our massive trade deal with Japan just started,” Trump announced in a social media post. Japan will also invest in a deepwater crude oil export facility and a synthetic industrial diamond manufacturing site off the coast of Texas, the White House said.
The projects are the first batch of $550bn Japan committed to invest under a trade deal with the US last year. In return, Trump agreed to lower US tariffs on Japanese exports, including cars.
“The scale of these projects is enormous, and cannot be done without a specific term, tariffs,” Trump said Tuesday. His controversial trade strategy has alarmed economists in the US, who warn it risks fueling inflation.
Most of the first investment will go toward the plant in Portsmouth, Ohio, which will generate 9.2 gigawatts of electricity each year, according to the administration. It is operated by SB Energy, a subsidiary of Japanese conglomerate SoftBank Group.
An industrial diamond manufacturing site in Georgia, valued at about $600 million, is designed to ensure that the US can fully produce all the synthetic diamond grit — needed domestically for advanced manufacturing and semiconductors. Trump said the project would “end our foolish dependence on foreign resources.”
China controls the world’s key minerals market, mining and processing rare earths needed for a wide range of industries, from oil refining to car manufacturing.
Beijing has not hesitated to exercise this hegemony, placing restrictions on global imports of its rare earths. Such barriers were at the center of an economic standoff with Washington last year. Trump and Chinese leader Xi Jinping reached an agreement last October that eased short-term tensions, with US officials repeatedly talking about the need to reduce dependence on China for critical minerals.
Beijing has begun in recent months to limit exports of rare earths to Japan amid a spat with Tokyo over Taiwan. Takaichi angered Chinese officials in November 2025 by suggesting that Japan could intervene militarily in the event of an attempted Chinese invasion of the self-ruled island.
“We will no longer be dependent on foreign supply for this important material,” Howard Lutnick, Trump’s commerce secretary, said of the planned industrial diamond project.
“Japan is providing the capital,” Lutnick added. “Infrastructure is being built in the United States. Income is structured so Japan is coming back and strengthening America’s strategic assets, expanded industrial capacity and energy dominance.”
Japan reported on Wednesday that its exports rose nearly 17% in January, thanks to a sharp increase in exports to China despite current tensions.
