Japan has promised large-scale investments in the United States and cut the reciprocal tariff rate by 10 percentage points. The Korean government has begun to understand Japan's investment structure in the U.S. Since Japan completed its tariff negotiations ahead of Korea, the aim is to prepare a negotiation plan based on the 'carrot' presented to the U.S. There is a possibility that the Korean government will benchmark the financial support measures for U.S. investment corporations established by the Japanese government to create similar investment programs for the U.S.
According to the Ministry of Economy and Finance, on the 25th, Japan promised to invest $550 billion (about 759 trillion won) in the U.S. under the name 'Japan Investment America Initiative.' The core of the investment funding plan involves loans and guarantees. It has been arranged for Japan's policy financial institutions to lend U.S. investment funds to domestic corporations or to partially compensate if corporations incur losses after investing on their own.
The Japan Investment America Initiative is expected to be carried out by the Japan Bank for International Cooperation (JBIC). In Korea, this would be comparable to Korea Development Bank (KDB) and The Export-Import Bank of Korea. A Ministry of Economy and Finance official noted, "While conducting tariff discussions with the U.S., we will actively refer to Japan's case." When asked whether 'Korea will also create a large-scale investment fund for the U.S.,' he remarked, "It is not appropriate to disclose the negotiation cards externally first," withholding further comments.
Foreign media have already reported specific figures for U.S. investments. The previous day, Bloomberg News cited a source saying that U.S. Secretary of Commerce Howard Lutnick proposed a $400 billion investment to Korea. This is the same amount the U.S. initially requested from Japan.
President Trump demanded that Japan increase its investment in the U.S. by $150 billion at the negotiation table, and this was achieved. Dan Scavino, Deputy White House Chief of Staff, posted a picture of the White House office on his social networking service (SNS) right after announcing the agreement on U.S.-Japan trade negotiations on the 22nd (local time). The photo shows a panel printed with the Japanese investment amount of $400 billion, with a thick pen crossing it out and changing the '4' to a '5'. After an additional $50 billion was added at the final announcement stage, Japan stated it would invest a total of $550 billion in the U.S.
Japan also promised to open up markets for rice and other agricultural products, as well as automobiles and trucks, under the Japan Investment America Initiative, and lowered the reciprocal tariff rate from 25% to 15%.
Korea is also reviewing U.S. investments as one of the cards to propose to the U.S. The proposed amount is said to be $100 billion. This figure purely combines the planned scale of corporate investments, and the possibility of it increasing further arises if government financial support such as loans and guarantees is included.
Experts believe it will be difficult for Korea to present tariff negotiation cards that would entice the U.S. like Japan did. Heo Jeong, president of the Korean International Trade Association and a professor at Sogang University, said, "To present a significant investment plan that can compete with Japan, we need to mobilize large corporations as it cannot be done solely with public enterprises," adding, "It remains uncertain whether the public sentiment would accept the government providing loans and guarantees to large corporations."
Korea-U.S. tariff negotiations appear to be off to a rocky start even before they begin. Vice Minister of Economy and Finance Koo Yun-cheol was reportedly set to depart for the scheduled Korea-U.S. Treasury and Trade 2+2 meeting in Washington, D.C., but was informed of a cancellation shortly before the departure. This incident occurred about an hour before the flight was supposed to take off.
The two countries agreed to hold another 2+2 meeting as soon as possible. However, the Ministry of Economy and Finance did not receive any reason from the U.S. as to why Secretary of the Treasury Besant would not attend the meeting. No future schedule has been set yet. The date for imposing reciprocal tariffs is set for the 1st of next month.