Japan has drawn up plans for investments in US oil, gas and critical mineral projects worth about $36bn under the first wave of a deal with 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 first wave of investment will go towards the plant in Portsmouth, Ohio, which will generate 9.2 gigawatts of electricity each year, according to the administration. It will be operated by SB Energy, which is a subsidiary of Japanese conglomerate SoftBank Group.
The industrial diamond manufacturing site in Georgia, valued at about $600m, is designed to ensure the US can fully produce all the synthetic diamond grit – a critical material for advanced manufacturing and semiconductors – it requires domestically. The project “will end our foolish dependence on foreign sources”, said Trump.
China controls much of the critical minerals market, dominating the world’s mining and processing of rare earths that are essential across a wide array of industries, from oil refining to car manufacturing.
Beijing has not hesitated to wield this dominance, imposing restrictions on global imports of its rare earths. Such curbs were at the heart of an economic spat with Washington last year. While Trump and the Chinese leader, Xi Jinping, reached a deal last October which reduced tensions in the short term, US officials have repeatedly spoken of the need to reduce reliance on China for critical minerals.
Beijing has started in recent months to restrict some exports of rare earths to Japan, amid a row with Tokyo over Taiwan. Takaichi angered Chinese officials in November 2025 by suggesting Japan could become militarily involved in the event of an attempted Chinese invasion of the self-governing island.
“We will no longer rely on foreign supply for this essential material,” Howard Lutnick, Trump’s commerce secretary, said of the planned industrial diamond project.
“Japan is providing the capital,” added Lutnick. “The infrastructure is being built in the United States. The proceeds are structured so Japan earns its return, and America gains strategic assets, expanded industrial capacity, and strengthened energy dominance.”
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.