US, Japan Launch $36B Energy and Minerals Push to Counter China

By Staff, Agencies

Japan plans to invest around $36 bn in US oil, gas, and critical mineral projects under its first deal with US President Donald Trump.

The US president and Sanae Takaichi, Japan’s prime minister, 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.

As a diplomatic row between Japan and China over the security of Taiwan continues, testing the Japanese economy, Takaichi said the projects would strengthen her country’s ties with the US.

While Takaichi did not directly mention China, she expressed hope in a statement that the investments would enhance Japanese and US economic security.

“Our massive trade deal with Japan has just launched,” Trump declared in a social media post. 

The White House said Japan would also invest in a deepwater crude oil export facility off the coast of Texas, and a synthetic industrial diamond manufacturing site.

The projects are the first batch of the $550bn Japan committed to invest under a trade deal with the US last year. In return, Trump agreed to reduce US tariffs on Japanese exports including cars.

“The scale of these projects are so large, and could not be done without one very special word, tariffs,” Trump claimed on Tuesday. His controversial trade strategy alarmed economists in the US, who warned it risked exacerbating inflation.

Most of the initial investment will fund the Portsmouth, Ohio plant, set to generate 9.2 gigawatts annually and operated by SB Energy, a subsidiary of Japan’s SoftBank Group.

The $600 million industrial diamond facility in Georgia aims to secure domestic production of synthetic diamond grit—vital for advanced manufacturing and semiconductors—with Trump saying it will end reliance on foreign sources.

China dominates the global rare earths market—vital to industries from oil refining to auto manufacturing—and has leveraged that control through export restrictions, fueling tensions with the US and Japan despite temporary easing between Washington and Beijing last year.

We will no longer rely on foreign supply for this essential material,” Commerce Secretary Howard Lutnick said, noting Japan provides the capital while the US builds the infrastructure.

Japan reported on Wednesday that its exports rose almost 17% in January, driven in part by a sharp rise in exports to China despite the current tensions.