“Agree First, Negotiate Later” — U.S.-Japan Investment Deal Faces Uncertainty

TradingKey - According to the Financial Times, there is a growing divergence between the U.S. and Japan over the details of a recently reported "$55 billion investment agreement."

U.S. Commerce Secretary Lutnick previously claimed that, under a new tariff deal framework, Japan would fund investments in key American strategic industries, with the U.S. capturing 90% of the profits. However, Japanese officials quickly pushed back, clarifying that profit distribution would be determined “based on each party’s actual capital contribution and risk exposure,” rather than involving one-sided concessions.

A confidential slide presentation released Friday by Japan’s Cabinet Office explicitly stated that if the U.S. is to receive 90% of the profits, it must also shoulder a corresponding share of the financing and risk.

Japanese officials revealed that no written agreement has been reached between the two sides, nor has any legally binding document been signed. According to insiders, the arrangement was hastily reached during a 70-minute meeting between Japan’s lead negotiator, Akizawa Ryo, and U.S. representatives — a discussion lacking detailed terms or formal procedural safeguards.

With Prime Minister Ishiba Shigeru facing political instability at home, the Trump administration fears that a potential leadership change could force the deal back to square one — prompting its push for a “commit first, negotiate later” approach.

This rushed, verbal understanding highlights fundamental disagreements between the U.S. and Japan over profit and risk sharing, casting serious doubt on whether the agreement can be implemented as described.