US Set To Provide Update On $550B Japanese Investment This Week, Lutnick Says

The U.S. and Japan reached a trade agreement in July to lower tariffs on Japanese goods to 15% from the previously pledged 25%, in return for a major investment package.

The U.S. will likely make an announcement this week related to Japan’s $550 billion investment in the country, U.S. Commerce Secretary Howard Lutnick reportedly said on Monday.

"The Japanese agreement, which we're going to announce later this week, that's $550 billion at the hand of Donald Trump," Lutnick said on the Ingraham Angle show on Fox News, according to a Reuters News report.

The U.S. and Japan reached a trade agreement in July to lower tariffs on Japanese goods to 15% compared with the 25% initially pledged, in return for a mega investment package likely to be a combination of government-backed loans and guarantees. However, details of the deal are not entirely known.

Japan’s top tariff negotiator, Ryosei Akazawa, is likely to visit the U.S. to discuss a document to formalize the agreement, as per the Reuters report, citing broadcaster FNN. Key Japanese goods such as autos and steel are subject to older tariff rates unless the deal is formalized.

Exports to the U.S., the biggest market for Japanese goods, slumped 10.1% in July, compared to a 11.4% fall in June.

Retail sentiment on Stocktwits about iShares MSCI Japan ETF (EWJ) was in the ‘bearish’ territory at the time of writing.

The U.S. trade negotiators have urged Japan to have a written agreement on the investment plans. However, according to a Nikkei report, Tokyo hopes to make the document less legally binding and demand a presidential order to reduce tariffs on Japanese goods soon.

Separately, on Monday, two South Korean companies pledged billions to the U.S. amid President Lee Jae Myung’s visit to Washington. Hyundai Motor Group disclosed plans to invest $26 billion into the U.S. over the next four years to bolster auto production capacity in America, while Korean Air ordered over 100 jets from Boeing.

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