Trump in Asia to Promote $900 Billion Investments… With Japanese and Korean Reservations and Doubts About Their Completion

In a move aimed at boosting the American economy, US President Donald Trump intends to tour Japan and South Korea next week.
The aim of this tour is to promote what he described as a “huge financial gain” of about $900 billion, which will come from investments in American factories, in addition to the natural gas pipeline project and other projects. These pledges were made by Tokyo and Seoul last August, in exchange for reducing the tariffs that Trump intends to impose from 25% to 15%.

Japan, for its part, offered an amount of $550 billion, but stipulated that these funds be directed to support its local companies, according to a memorandum issued in September. Sanai Takaichi took over as Prime Minister on Monday and expressed her respect for Trump within an untested coalition government. The memorandum of understanding stipulates the formation of a committee headed by Commerce Secretary Howard Lotnick to propose investments, giving Japan 45 days to respond, with priority given to Japanese contractors and suppliers. The newspaper “Asahi Shimbun” quoted “Lotnick” as saying: “Japan has submitted the necessary papers… They have given us 550 billion dollars to invest for the benefit of America, build the Alaska pipeline, build nuclear power plants, improve electricity networks, and produce public antibiotics in America.”

In return, the newspaper indicates that South Korea has offered an amount of $350 billion, but prefers a dollar swap plan and loan guarantees to facilitate financing, and refuses to pay in advance for fear of flooding its economy. So far, there is no written agreement with Washington, while high US tariffs on Korean cars remain in place. Kim Yong-beom indicated that the two sides are “approaching” deals that are “mutually beneficial and that the Republic of Korea can afford,” while acknowledging the risks of the exchange market.

According to the newspaper, Trump affirms that tariffs have forced investments to “return” and that it is a national security issue, saying: “Without tariffs, you would not be able to make the deal… Tariffs threaten national security,” adding: “Without tariffs, it will be a very difficult task.” Through these pledges, the White House seeks to demonstrate “America’s strength” before an expected meeting between Trump and Chinese President Xi Jinping in South Korea. Trade Representative Jamison Greer considered that the strategy “encourages allied investments in America’s industrial future” in the face of Chinese manufacturers.

On the other hand, experts warn that imposing investment within the United States may weaken the economies of allies closest to China. Andrew Yu believes that the essence of what Tokyo and Seoul are seeking is to “reduce tariffs and avoid Trump’s anger.” The “Nippon Steel-US Steel” deal is cited as an example of conditional cooperation after Trump later gave his support in exchange for arrangements that give the US government a say in the acquired company.

Relations with Seoul were strained after an American raid on a Hyundai factory in Georgia on September 4 and the detention of more than 300 South Koreans, which led to Korean demands for a guarantee of legal protection for its workers. Since then, Seoul has said that Washington will allow Korean technicians to enter through short-term visas or visa waivers to support industrial sites, while Lee Jae-myung stressed that companies “will hesitate” to invest without improving the visa system.

Despite weeks of talks, there are no clear breakthroughs in the mechanisms for implementing investments, but Trump is optimistic that tariffs will stimulate an “economic boom” starting next year.