$550 Billion U.S.-Japan Investment Fund Begins with First Energy Projects

By Michael Katz | Tuesday, December 16, 2025, 10:51 PM EST

The U.S. and Japan are preparing to begin reviewing energy projects that could become the first investments under a landmark $550 billion joint fund established as a key component of their July trade agreement.

A consultation panel tasked with weighing potential investments is scheduled for Wednesday in Washington, D.C., and is expected to focus on a small number of energy initiatives. The discussions remain confidential due to the preliminary nature of the process.

This initial session marks an early step in a broader review process for approving projects that could access the fund. Under the agreement, an investment committee chaired by Commerce Secretary Howard Lutnick will evaluate proposals and submit recommendations to President Donald Trump, who retains final authority over project approvals. The panel is anticipated to reconvene next week, with potential project submissions to Trump expected early in 2026. Specific details regarding the projects—including their sectors and U.S. states involved—have not yet been disclosed.

The $550 billion fund was central to a framework agreement between the U.S. and Japan designed to ease tariffs imposed by President Trump on Japanese exports. Under this accord, U.S. duties on Japanese automobiles were reduced to 15%, with most other covered goods subject to identical rates. The nations initially discussed a $400 billion investment commitment before President Trump pressed Tokyo to increase it to $550 billion.

The memorandum of understanding governing the fund stipulates that Japan will finance projects selected by the president following consultations between the governments. If Tokyo ultimately declines to fund a proposed project, the agreement permits the U.S. to adjust return allocations and, in certain cases, impose higher tariffs on Japanese imports—actions that could threaten the broader trade arrangement.

Energy projects are currently the first initiatives to formally advance toward selection. The agreement allows investments until January 19, 2029—the final day of President Trump’s second term—but does not require full fund deployment by that date.

“I’d be very surprised if the full $550 billion ever becomes reality,” said Paul Nadeau, a professor at Temple University’s Japan campus and a visiting research fellow at the Institute of Geoeconomics.

U.S. and Japanese officials have described the fund in different terms, emphasizing distinct elements of their agreement. President Trump has referred to the funds as a “signing bonus,” stating, “That’s our money. It’s our money to invest as we like.” Japanese officials have insisted that the deal must be implemented without violating the laws of either nation.

Beyond energy, the fund is intended to support investments tied to economic and national security priorities, including semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, artificial intelligence, and quantum computing.

Michael Katz is a reporter with more than 30 years of experience reporting and editing on news, culture, and politics.