The United States and Japan have unveiled a major package of investment projects worth US$36 billion that will see Japanese capital flow into critical energy, oil, gas and minerals infrastructure across several U.S. states, marking the first significant phase of a broader US$550 billion trade and investment commitment agreed under a trade pact between the two countries. The announcement, made on 17 February 2026, underscores a strategic push by both allies to strengthen economic security, deepen industrial cooperation, and reduce reliance on China’s dominance in critical materials and supply chains.
At the centre of the announcement was U.S. President Donald Trump, who hailed the developments as a milestone for American energy capacity and economic ties with Tokyo. “Our massive trade deal with Japan has just launched!” Trump wrote on social media, emphasising that the projects would help “end our foolish dependence on foreign sources” for essential materials and energy. Japanese Prime Minister Sanae Takaichi also framed the investments as a way to strengthen Japan‑U.S. alliances and enhance collective economic security, particularly in light of rising geopolitical tensions in the Indo‑Pacific region.
The largest of the announced ventures is a natural gas‑fired power plant near Portsmouth, Ohio, financed to the tune of roughly $33 billion. According to statements from the U.S. Commerce Department, this facility is expected to generate 9.2 gigawatts of electricity, making it one of the most powerful gas‑fired plants in U.S. history and capable of powering millions of homes and industrial operations. The plant is to be developed and operated by SB Energy, a subsidiary of Japan’s SoftBank Group, with officials saying it could also help provide reliable baseload power needed for data centres and advanced industrial electrification.
Beyond the Ohio project, Japan’s investment will support at least two other strategic facilities. In Texas, a deepwater crude oil export terminal, often referred to as the Texas GulfLink project, is being developed with approximately $2.1 billion in capital. U.S. authorities say once operational this facility could handle between $20 billion and $30 billion worth of annual U.S. crude exports, significantly expanding America’s role in global energy markets and supply chains.
In Georgia, about $600 million is earmarked for a new synthetic industrial diamond manufacturing facility. This project aims to produce critical materials, particularly diamond grit used in semiconductors, advanced manufacturing and energy sectors, entirely within the United States, cutting dependence on Chinese sources for these key inputs. By establishing domestic production capacity, officials hope to fortify supply chains for technologies such as automotive components, aerospace, and precision industrial tools.
Economists and analysts see the investments as part of a broader economic strategy that reflects shifting global dynamics in manufacturing, energy, and geopolitics. China currently controls a large share of the world’s supply chains for rare earth elements and critical minerals, which are indispensable for electric vehicles, renewable technologies, defence systems and high‑tech manufacturing. By attracting Japanese capital to build infrastructure that diversifies sources and boosts domestic capabilities, Washington and Tokyo are signalling a joint response to Beijing’s industrial dominance.
However, not all reactions have been uniformly positive. Some economists in the U.S. have expressed concern that the scale of the investments, especially in fossil fuel infrastructure, could exacerbate inflationary pressures or complicate climate policy objectives. The trade pact itself, which involved lowering tariffs on Japanese imports in exchange for the investment commitments, also drew scrutiny from critics who argue that it may favour economic nationalism over market competition.
Despite these debates, leaders from both countries emphasise the strategic importance of the initiative. Takaichi, in particular, said the projects are designed to build resilient supply chains in areas critical for economic security, including energy, critical minerals, and even emerging technologies such as artificial intelligence that depend on robust power and material inputs. U.S. officials similarly framed the investments as reinforcing America’s industrial and energy base, generating jobs and securing long‑term economic advantages.
The $36 billion package, though only the first tranche of the broader $550 billion pledge, represents a tangible shift in how large‑scale capital deployment and trade deals can be used to address strategic imperatives. It also highlights how economic policy and geopolitics intersect in a world where supply chain security, energy independence, and industrial capacity are increasingly seen as essential to national power.
