Japan will allocate part of its $550 billion (about 80 trillion won) U.S. investment package to reorganizing the supply chain for rare earth elements. Immediately after China pulled out its rare earth export control card, the United States and Japan moved to build a resource alliance in response.
According to the Nikkei on the 26th, U.S. Ambassador to Japan George Glass revealed the details of a U.S.-Japan tariff negotiation agreement centered on the above in a lecture held in Tokyo the previous day. The event was co-hosted by the Japan Center for Economic Research (JCER) and the Japan Institute of International Affairs (JIIA).
Rare earth elements are 17 elements essential to producing advanced industries and military equipment such as smartphones, electric vehicle batteries, computers, and stealth fighters. China controls 80%–90% of the global rare earth production and refining market.
At the event, he said, "In artificial intelligence (AI) and advanced technology, rare earths are indispensable minerals," and added, "With this investment, we will seek to advance the U.S. mining industry and refining capacity, and job creation can be expected." He went on to say, "The United States and Japan will be freed from Chinese dominance of (rare earths)."
The announcement came ahead of U.S. President Donald Trump's tour of Asia, particularly his visit to Japan starting on the 27th. Trump attended the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur, Malaysia, on the 26th. On the 27th, he will travel to Tokyo to hold his first summit with new Japanese Prime Minister Sanae Takaichi. U.S.-Japan cooperation on the rare earth supply chain is expected to be a key agenda item for the meeting.
Tadashi Maeda, president of the Japan Bank for International Cooperation (JBIC), who joined the lecture that day, disclosed a specific working-level schedule for the large-scale rare earth investment plan. He said, "U.S. officials involved in selecting rare earth investment destinations are scheduled to visit Japan on the 27th to coincide with President Trump's trip." The Japanese government will mobilize its policy finance institutions for this investment. It plans to actively support its corporations' investments in the United States by using the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).