Trump’s Japan ‘investment vehicle’ could become trade talk template — even if nobody is sure what it is
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Trump’s Japan ‘investment vehicle’ could become trade talk template — even if nobody is sure what it is
A key part of a trade deal announced with Japan is a plan for a “new Japanese/USA investment vehicle” Trump and his team said it will put $550 billion aside for the president to finance new investments in the US. Observers are watching this unusual provision closely amid a growing expectation it will serve as a template of sorts for remaining trade talks. Trump also appeared to suggest Friday that it may be what’s needed to close a deal with the European Union. But conflicts grow over exactly what was agreed to, especially a disagreement on how profits might be split.
Observers are watching this unusual provision closely amid a growing expectation it will serve as a template of sorts for remaining trade talks — even as conflicts grow over exactly what was agreed to, especially a disagreement on how profits might be split.
It’s just one of the questions that cropped up immediately after the president’s announcement Tuesday — and appears to have only grown in the days since.
Trump and his team have deployed a range of metaphors to describe this part of the deal, from a “signing bonus for the country” (Trump) to a “national security sovereign fund” (Commerce Secretary Howard Lutnick) to a “blank check” (trade adviser Peter Navarro).
The Japanese are describing things very differently, suggesting that the provision is more akin to a non-legally binding agreement to look for joint investment opportunities for both US and Japanese companies.
President Trump speaks to reporters before traveling to Scotland on July 25. (Yasin Ozturk/Anadolu via Getty Images) · Anadolu via Getty Images
“There are a lot of details that need to be worked out here,” former trade negotiator Wendy Cutler, now at the Asia Society Policy Institute, noted on Yahoo Finance on Friday.
She added that the very different accounts from different sides at the very least “does not bode well for smooth implementation.”
Yet the bumpiness has done little to slow momentum for the idea in Trump’s orbit, with a sense that similar provisions could be part of any possible deal with South Korea and perhaps Taiwan.
Trump also appeared to suggest Friday that it may be what’s needed to close a deal with the European Union.
As he left for Scotland, the president described a deal with the EU as far from a sure thing, adding that what might push talks over the line is a pact “where they buy down their tariffs.”
Trump officials, for their part, stand by their side’s version of the deal with Japan and often note they have an easy way to make sure things work out to their liking: the constant threat of re-raising tariffs.
A White House spokesperson declined to offer further details Friday on exactly how the investment vehicle would work and what Trump meant with Friday’s comments around EU negotiations, which are set to continue this Sunday while the president is in Scotland.
Read more: What Trump’s tariffs mean for the economy and your wallet