Trump’s political present and Takaichi’s opportunist transfer

Japan’s Prime Minister Sanae Takaichi speaks throughout a dinner with US President Donald Trump within the State Dining Room of the White House in Washington, March 19, 2026. /VCG

Editor’s word: He Weiwen is a senior fellow with the Center for China and Globalization. The article displays the writer’s opinions and never essentially the views of CGTN. 

Japanese Prime Minister Sanae Takaichi met with US President Donald Trump within the White House on March 19 and reached an association on the second batch of Japanese funding plans within the US, as a part of the $550 billion basket of their bilateral commerce settlement signed final July.

Apart from the primary batch of funding of $36 billion introduced final month, they agreed an inventory of the second batch of power cooperation, with complete funding of $73 billion, together with small modular reactor energy vegetation in Tennessee and Alabama with funding of $40 billion by GE Vernova of the US and Hitachi of Japan, and pure gasoline energy vegetation in Pennsylvania and Texas with funding of $33 billion. Besides, Japan has deliberate a substantial funding improve within the US oil business.

It is a giant stunning political pie within the sky for Trump. Firstly, investments of this measurement usually take years of know-how and monetary feasibility research earlier than actual funding can truly start. The research themselves could outlast his second time period. Secondly, Japan doesn’t have the potential to make such large funding within the US. During the previous 70 years, for the reason that Fifties, the cumulative Japanese direct funding within the US was $754.07 billion, or just a little over $10 billion per yr. But Trump does not must hassle about any of this, all he wants is to point out this funding dedication to his constituency, particularly earlier than the mid-term election.

It is a two-fold consolation of opportunism for Japan, conserving the 15% US tariff degree as agreed final July, and lowering the over-dependence on oil provide from the turbulent Middle East. The first consolation is pointless. As the “reciprocal tariff” was struck down by the US Supreme Court on February 20, and the White House had no different alternative however to set off 15% Section 122 tariffs worldwide for 150 days, to be adopted by Section 301 tariffs, together with on Japan. Trump is about to impose tariffs on Japan regardless of how obedient the latter is. 

On the opposite hand, Japan is not too nervous in regards to the tariffs. For the entire yr of 2025, Japanese exports to the US fell by 4.1% with the 15% tariff fee, however hit a document worldwide as the opposite markets greater than offset the decline from the US market. 

The second consolation is affordable however of no imminent use. While over 90% of Japan’s oil provide was from the Middle East in 2025, solely 3.8% was from the US. Remember, the US is a web oil importer. In 2024, its oil export was 4.2 million barrels per day whereas imports had been 6.4-6.5 million barrels day by day.  Hence, it has little additional oil to produce Japan. The introduced two mega funding plans don’t have anything to do with Japan’s oil provide, however solely energy vegetation for America. The deliberate funding within the US oil and gasoline business will assist however take years, and the present turbulence within the Middle East is momentary. Moreover, the placement of Japanese oil and gasoline investments needs to be on the US Pacific Coast, predominantly Alaska, not Texas, because the delivery line goes by means of the Gulf of Mexico and Panama Canal. But Alaska was not on the agenda this time.

The prospect of the introduced $73 billion funding plans stays unsure. The first uncertainty lies with the US. The unrepentant White House tariff coverage will stay for the remainder of Trump’s second time period, thus elevating the manufacturing value within the US. The erratic habits of Trump’s decision-making casts nice enterprise uncertainties over the funding local weather in America. It is troublesome to work out monetary feasibility plans for main investments. Many mega funding plans have been suspended. A report by the Joint Economic Committee of the US Congress final August estimated that US manufacturing funding would decline by 13% yearly from 2024 to 2029. In truth, the US manufacturing manufacturing index for January 2026 stood at 97.6, 2.4 factors decrease than in 2017, the bottom yr. The second uncertainty lies with Japan. With oil costs skyrocketing in the intervening time, Japanese companies’ revenue margin has been below extraordinarily heavy pressure. A latest report by Daiwa Securities confirmed that the oil worth of $90 per barrel will improve Japan’s import prices by 8.1 trillion yen. It will improve to 11.4 trillion yen at $100 per barrel and to 17.8 trillion yen if the oil worth goes as much as $120 per barrel. Hence, there can be little revenue margin for funding.

Japan’s complete funding dedication of $550 billion can be a giant pie within the sky. It will take 40 years to perform on the tempo of the final 70 years. Likewise, batch one and batch two funding plans within the US, at $109 billion, may also take a number of US presidential phrases. It is thus all up within the air in the intervening time. The solely certainty is Trump’s steady stress and Japan’s steady compliant habits. 

Source: CGTN