The news of Japan to invest $36bn in US oil & gas as well as critical mineral projects is doing the rounds which, as a matter of fact, is the first tranche of its $550 billion commitment as per the trade agreement that it struck with President Donald Trump.
“Our MASSIVE Trade Deal with Japan has just launched!” Trump posted on February 18, 2026, on social media. “The scale of these projects is so large and could not be done without one very special word, TARIFFS.”
As per Sanae Takaichi, the Japanese Prime Minister, the projects were crafted so as to build resilient supply chains by way of steadfast cooperation in areas that apparently are critical for economic security, such as critical minerals, energy along with artificial intelligence.
“We believe this initiative is fully aligned with its core objectives: promoting mutual benefits between Japan and the United States, ensuring economic security, and fostering economic growth,” the Japanese Prime Minister wrote.
It is well to be noted that the most prominent investment is a natural gas facility based out of Ohio, which is most likely to generate 9.2 gigawatts of power, as per the statement from Howard Lutnick, US Commerce Secretary, which, as per Trump, is the largest in history.
Interestingly, as part of Japan to invest $36bn in US oil & gas, it is anticipated to invest almost $33 billion in the gas plant, which is going to be led by SB Energy, the SoftBank Group Corp. subsidiary, confirmed a US Commerce Department fact sheet putting forth the investments. The Ministry of Economy, Trade and Industry of Japan went on to list SoftBank Group as the company that is involved in the project.
Toshiba Corp. and Hitachi Ltd., both of which are Japanese companies, have also expressed their desire to participate in the gas project, confirmed Ryosei Akazawa, the country’s trade minister, who told reporters on February 18, 2026.
The fact is that if that plant operates at its full capacity, it is going to be the equivalent of nine nuclear reactors or around the amount of power that is consumed by almost 7.4 million homes on the largest US grid, which is operated by PJM Interconnection LLC.
The second project happens to be a deepwater crude export facility, which is based out of the Gulf of Mexico, says Lutnick. The $2.1 billion investment within the facility, the Texas GulfLink export terminal, is going to be taken care of by Sentinel Midstream and is most likely to generate around $30 billion in yearly US crude exports when functioning at its full capacity, says the Commerce Department fact sheet.
The initial social media post by Trump pertaining to the project made way for some confusion, as it described the investment as a liquefied natural gas facility.
In addition to this, Japan is also anticipated to invest in a synthetic industrial diamond manufacturing facility, which, as per Trump’s post, would be located in Georgia. The diamonds happen to be a “critical input for advanced industrial and technological production,” says Lutnick.
The project, which apparently is a high-pressure and high-temperature synthetic diamond grit facility, is going to receive a $600 million investment and also involves Element Six, which is a subsidiary of De Beers, confirmed the Commerce Department. Diamond grit is made use of by industrial manufacturers in the semiconductor, automotive, and energy sectors for its hardness properties.
According to Minoru Kihara, Japanese Chief Cabinet Secretary, in a press briefing on February 18, 2026, where he confirmed the projects, “Both governments will continue to work closely together to fine-tune the details and ensure the speedy start of these projects.”
Notably, this long-awaited announcement indeed marks a step forward when it comes to the trade and economic pact that Trump announced with Japan in 2025. It apparently comes just weeks before Prime Minister Takaichi is set to meet with Trump in Washington.
Interestingly, the selection comes after a joint panel first met in December 2025 in order to consider projects that are ultimately selected by Trump himself based upon the recommendations coming in from an investment committee that he established, along with input coming in from the Japanese officials.
The fund is meant to lead to a surge in the wave of Japanese investment when it comes to major US industries and was also an important pillar of the tariff deal, under which Trump agreed to set taxes at 15% on Japanese products and also lower the duty when it comes to automobiles, which, by the way, is a critical driver as far as the Japanese economy is concerned. The fact is that the $36 billion total is equivalent to over half of the net foreign direct investment from Japan in the US in 2025, confirmed by the Japanese Finance Ministry figures.
Execution of the agreement is most likely to be a top agenda item when the meeting between Trump and Takaichi takes place in Washington on March 19, 2026.
Apparently, Lutnick and Akazawa met in Washington last week in order to chalk out the details pertaining to the first tranche of investments. Akazawa remarked that he doesn’t expect the projects backed by the $550 billion fund to be that of high-risk, high-return, therefore signaling to the fact that the Japanese are looking out for initiatives giving safe returns and not less-certain investments.
Lutnick, in a statement on February 17, 2026, said that “Japan is providing the capital. 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.”
The initial investment when it comes to the power generation facility is timely. Growing demand when it comes to new data centers, specifically to chase the artificial intelligence boom, has bloated the cost of making sure of adequate energy supplies.
Both the nations have already identified potential projects that range from $350 million to almost $100 billion during the Japan visit made by Trump in 2025. That model went on to include energy and artificial intelligence, along with critical mineral investments that involved SoftBank, Toshiba Corp., and Westinghouse, as well as certain other companies.
It is well to be noted that Japan Bank for International Cooperation, which is government-owned, as well as Nippon Export and Investment Insurance, are most likely to play leading roles when it comes to financing the projects. It is not yet clear as to how much money is going to be committed in direct investment form. Akazawa said in 2025 that only 1-2% of the $550 billion mechanism is going to consist of cash investments, with the major share coming via loans and loan guarantees.
Once a selection is made, Japan is going to have 45 business days so as to fund the effort, confirming the agreement between the countries.
If Japan opts out of funding a project, the US may as well claw back certain revenues or even hike tariff levels, says the agreement. All this could also risk much higher duties when it comes to Japanese imports into the US. Trump also has threatened to raise the tariffs to 25% and then scaled it back to 15% post Japan agreeing to pump more investment into the US via a $550 billion fund.
Trump has been pretty wary about the pace of execution when it comes to a similar deal with South Korea, which again is a major competitor with Japan in terms of auto manufacturing, and has also threatened them to raise tariffs once again. That story highlights the link between investment pledges and also tariff alterations, which accompanied them.
The announcement follows quite a historic electoral victory for Takaichi earlier in February 2026. She has been formally re-elected as premier on February 18, 2026. Takaichi has also vowed to give priority to the strong ties with the US. Trump has gone on to praise Takaichi, wishing her great success pertaining to the Conservative Peace Through Strength Agenda.
A senior fellow at the Hudson Institute, William Chou, confirmed that the three projects do reflect shared US as well as Japanese priorities when it comes to energy, AI, as well as semiconductor sectors and were indeed a great match for skill sets as well as the Japanese industry’s understanding of the US industrial spectrum.
According to Chou, “This announcement ensures political momentum ahead of PM Takaichi’s trip to Washington next month and demonstrates that Japan is an ally that follows through on its promises.”
