Fashion
Japan to back $550-bn investment package under US tariff deal
The package, detailed in a recent memorandum of understanding (MoU), focuses on sectors like metals, pharmaceuticals, energy, shipbuilding, artificial intelligence, quantum computing and chips, with investments planned till January 2029.
Japan will set up an investment facility at the state-owned Japan Bank for International Cooperation to back a $550-billion investment package under its tariff deal with the US.
President Donald Trump will direct the investments and the projects.
All investments will be made before the conclusion of Trump’s term in office.
The US-Japan MoU offers the latter the choice to opt out of some investments.
President Donald Trump will direct the investments and the projects funded by Japan. All investments will be made before the conclusion of Trump’s term in office.
The MoU document, signed in Washington, DC, by US commerce secretary Howard Lutnick and Ryosei Akazawa, Japan’s minister in charge of economic revitalisation and the country’s chief tariff negotiator, includes a ‘boomerang’ clause, which states that tariffs could be taken back to higher levels if Japan declines to make investments.
Safeguards include a committee and consultation structure that brings some governance to the process, profit-sharing that is more favourable to Japan than originally envisioned and a recognition that Japan does have some authority to pick and choose deals.
“What we’ve achieved with our Japanese partners is an absolute game changer for America’s future—and it’s exactly what the America First trade agenda is all about,” Lutnick wrote in a post on X.
“For the first time ever, President Trump will literally direct these investments for the benefit of America,” he wrote.
As part of the deal reached by the two countries on July 22, Japan committed to invest up to $550 billion into key industries in the United States, but the time frame and precise implementation were left undefined.
The investment committee should consult a committee with representatives from both nations before submitting recommendations to the US President. The body will provide input related to the strategic and legal considerations of the investments, according to US media reports.
Each selected project will be executed by a special-purpose entity managed by the United States or a designee in the capacity of general partner, the MoU noted.
The MoU offers Japan the choice to opt out of particular investments. But before such a decision, it must consult with the United States. By declining to fund certain projects, Japan will lose profit rights until the United States is compensated, and risks new tariffs imposed on its exports.
The MoU also outlined a two-phase distribution plan for profits generated by the projects. Profits are shared 50-50 until both countries have received a baseline entitlement amount, which covers interest, part of the original investment and any carryover. After that, the United States gets 90 per cent of profits and Japan gets 10 per cent.
Fibre2Fashion News Desk (DS)
While trends in high frequency indicators for January-February 2026 appear favourable, the heightened uncertainty around the duration of the Middle East conflict casts a shadow on the near-term macroeconomic outlook for India amid high import dependency for items like crude oil, natural gas and fertilisers, it noted.
India’s FY27 GDP growth is likely to slow to 6.5 per cent from the projected 7.5 per cent in FY26 owing to the impact of higher energy prices and concerns around energy availability, ICRA Ratings said.
The heightened uncertainty around the duration of the Iran war casts a shadow on the near-term macroeconomic outlook for India.
If the conflict lasts longer, the adverse effects could widen across sectors.
If the conflict lasts for an extended period, the adverse implications of the same could widen across sectors, amid an uptick in input costs and the consequent impact on profitability of the India corporate sector.
Amid the projected uptrend in the consumer price index-based inflation in FY27 with risks tilted to the upside, ICRA Ratings expects an extended pause on the policy rates by the central bank’s monetary policy committee in the fiscal despite the anticipated softening in the GDP growth. However, it expects the Reserve Bank of India to continue to intervene on the liquidity front during FY27.
The available data for January–February FY2026 indicate a positive trend across most non-agricultural indicators, with the year-on-year performance of 12 out of 18 indicators improving compared to the third quarter of FY26, while the remaining six deteriorated.
Fibre2Fashion News Desk (DS)
Indonesia’s apparel exports rose modestly to $8.705 billion in 2025 from $8.316 billion in 2024, reflecting gradual recovery.
The US remained dominant, accounting for over 56 per cent of shipments, highlighting growing market dependence.
While Japan, South Korea and Europe offered stability, exports stayed concentrated in key products and segments.
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Methanol prices in India have surged nearly 150 per cent from pre-Iran–US tension levels, tracking a sharp rise in crude oil and tightening global energy markets.
Hormuz disruption risks, limited rerouting capacity, rising freight and insurance costs, and constrained imports are fuelling volatility, with prices seen approaching ₹90 per kg.
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