Washington: Recent trade deals by US President Donald Trump with India and other countries are starting to have consequences. The tariff cuts have come with a condition that these countries invest heavily in US projects.
Japan became the first country affected by this policy. The trade deal with Tokyo reduced tariffs on Japanese goods to 15 percent, but in exchange, the country agreed to invest in multiple US projects worth billions of dollars.
The Trump administration confirmed that Japan will provide $36 billion in financing for three major projects, which include a deepwater crude oil export facility in Texas, a synthetic industrial diamond plant in Georgia and a natural gas power plant in Ohio.
Valued at $33 billion, the Ohio power plant will be the largest natural gas-based facility in the state. It is expected to generate 9.2 gigawatts of electricity per year. This exceeds the state’s total electricity demand. The plant will be operated by SB Energy, a subsidiary of Japanese tech investor SoftBank Group.
In Texas, Japan will invest $2.1 billion in the GulfLink deepwater crude oil export facility, which is projected to export crude worth between $20 and $30 billion every year.
A synthetic industrial diamond plant in Georgia will manufacture diamond grit to fully meet US demands. Operated by Element Six, which is part of the De Beers Group, the plant will produce high-pressure synthetic diamond grit used in advanced manufacturing and semiconductor production. At present, the United States relies heavily on China for this supply.
The US trade strategy is seen as a combination of tariff relief and leveraging foreign investment to strengthen domestic infrastructure and reduce dependence on other countries for critical materials. The Japan deal shows how tariff reductions are linked with commitments of direct investment. It also points to a change in how US trade policy turns into domestic economic projects.
The move also highlights a larger strategy to ensure supply chain security, particularly in industries where the United States has previously relied on China. By tying trade deals to domestic investments, the Trump administration wants to balance international trade benefits with long-term industrial and energy growth within the United States.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
