U.S. and Japan set 50-50 profit split on $550 billion investment package

The United States and Japan have agreed on a profit-sharing arrangement that will guide roughly $550 billion in Japanese-funded projects across the United States. Commerce Secretary Howard Lutnick confirmed the framework during an interview on CNBC, outlining how returns will be divided and how the money will be deployed.

How the profit split will work

Under the deal finalized last week, Tokyo will provide up to $550 billion for American-based infrastructure and manufacturing initiatives selected by the U.S. government. Lutnick said profits generated by those projects will be divided equally between the two countries until Japan recoups its full principal. After that point, the split will shift to 90 percent for the United States and 10 percent for Japan.

An investment committee is being formed to recommend individual projects. Once the panel identifies opportunities, the Commerce Department will seek presidential approval and then issue a “capital call” to Japan, Lutnick explained. U.S. contractors will handle construction and operations, while Japan will provide financing that officials expect to raise through new debt issuance.

Tariff terms underpin the package

The investment pledge emerged from a broader tariff agreement announced by President Donald Trump. The accord sets a 15 percent baseline tariff on Japanese goods entering the United States, along with additional sector-specific levies. Officials in Washington contend that the lower standard rate, when compared with earlier proposals, offers relief to Japanese exporters in exchange for the multibillion-dollar funding commitment.

Lutnick argued that Japanese consumers should benefit from reduced duties, while taxpayers ultimately avoid long-term costs if the projects deliver the expected returns. “For their country’s perspective, it’s a good deal,” he said.

Focus areas: nuclear energy and critical medicines

Although the committee has not published a final list, Lutnick pointed to U.S. nuclear power plants and domestic production of antibiotics as priority targets for investment. Both sectors align with the administration’s objective of strengthening strategic industries and reducing reliance on foreign supply chains. Funding could also be directed at transportation, advanced manufacturing and other capital-intensive projects that create jobs in the United States.

By tapping foreign financing while keeping construction and operational work at home, the administration hopes to accelerate large-scale development without significant federal outlays.

Legal backdrop: high-stakes tariff litigation

The agreement arrives as several of President Trump’s existing tariffs face judicial scrutiny. The U.S. Supreme Court has scheduled oral arguments for the first week of November to review a lower-court ruling that declared some of the administration’s most stringent levies unlawful. A decision could influence the durability of the new Japan-U.S. arrangement, depending on how the Court interprets executive authority over trade measures.

Until the ruling is issued, the Commerce Department is moving forward with the Japan-funded program, stating that construction timelines and hiring plans will proceed once projects secure final approval.

Next steps and economic impact

In the coming weeks, the investment committee is expected to outline initial project recommendations and submit them to the White House. If approved, U.S. firms would begin recruiting skilled labor, ordering materials and establishing supply contracts. Lutnick emphasized that the structure enables rapid mobilization while giving Japan clear visibility into repayments.

Economists note that a capital infusion of this scale could provide a significant boost to U.S. manufacturing capacity and related employment, though the final impact will depend on project selection and execution.

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