Overview of the MOU On September 4, the Japanese and US governments signed a memorandum of understanding regarding the Japan-US agreement from July and issued a joint statement. This MOU clarifies specific details including target sectors and selection methods for Japan's $550 billion investment in the US.
Basic Investment Conditions Regarding investment scale and timeline, Japan will invest $550 billion in the US by January 19, 2029.
Target sectors include semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, energy including pipelines, artificial intelligence (AI), and quantum computing.
Investment Selection System An Investment Committee, chaired by the US Secretary of Commerce, will make recommendations to the US President.
Before making recommendations, the Investment Committee will consult with a "Consultation Committee" composed of representatives designated by both Japan and the US.
Japan retains the right to choose not to provide investment funding at its own discretion, but must consult with the US before making such a decision.
Performance Guarantees and Sanctions Under the sanctions clause, if Japan fails to provide funding for projects selected through the MOU process, the US may raise tariff rates on Japanese products.
For performance guarantees, if Japan faithfully implements the MOU and does not fail to provide funding, the US will not raise tariff rates on Japanese products covered by the July Japan-US agreement.
US Support Content Infrastructure support includes leasing of federally-owned land related to projects and arranging infrastructure such as electricity and water.
Procurement preferences include selecting Japanese companies instead of foreign companies when possible in vendor and supplier selection for projects.
Profit Distribution System A Special Purpose Vehicle (SPV) will be established for each investment, managed and governed by the US or entities designated by the US.
Profit distribution will be 50% each for Japan and the US until a total amount equal to the deemed distribution amount is distributed, followed by 90% US and 10% Japan thereafter.
Legal Binding Force The MOU does not create legally binding rights or obligations. Regarding modifications or termination, it can be modified at any time with written consent from both Japan and the US, and can be terminated at any time with written notification to the other country.