US trade deal with Japan
Is the $US550bn investments deal in fact largely made up of loans & loan guarantees? Are the trade deals real commitments for action or statements of intent?
Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Is the $US550bn investments deal in fact largely made up of loans & loan guarantees? Are the trade deals real commitments for action or statements of intent?
Hi Robert,
Like you we are forced to read between the lines on most of the “trade deals”. President Trump declared a “massive” trade and investment agreement with Japan featuring a US$550 billion investment package into key U.S. industries. He claimed the U.S. would receive 90% of profits from the investment, though Japan’s officials later clarified that profits will be shared with relevance to funding arrangements and risk exposure.
The simple answer is yes, the US–Japan $550 billion investment deal is largely made up of loans and loan guarantees. The $550B figure is not a cash transfer or hard investment, but a projection (headline figure) involving structured financing expected to be spread over several years and largely conditional on project approvals and private-sector participation – a lot can happen in a few weeks at the moment, let alone a few years!
In terms of binding or statements of intent of course there’s simple middle ground!
The $550 billion U.S.–Japan trade deal announced last month is largely a statement of intent, not a legally binding treaty.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.