Lutnick: Japan's $550 billion will be directed by Trump
'What's going to happen is the investments in America are for the benefit of the economic and national security of the United States of America, driven by Donald Trump,' Lutnick told CNBC on Tuesday.
His comments closely track and further support earlier comments by Trump, Treasury Secretary Scott Bessent and Lutnick himself. Together, they have described a pledge that involves new capital from Japan being invested in the United States with America in control and taking 90% of the profits.
"It is their money," he added, "their money that's going to create these investments so that we can build the pipelines, we can build the nuclear, we can build semiconductors, we can build pharmaceuticals in America to protect America."
Japanese officials view the handshake agreement reached on July 22 differently.
They have said that Japan will provide loans, loan guarantees and equity investment up to the $550 billion total through financial institutions backed by the government, and that direct equity investment will be just 1%-2% of the $550 billion.
They have also brought into question the governance described by the three U.S. officials.
'We can't cooperate on things that don't benefit Japanese companies or the Japanese economy," Ryosei Akazawa, Japan's chief tariff negotiator, said earlier this month.
CNBC host David Faber pressed Lutnick — noting that Japan has said the money will mainly be in the form of loan guarantees to Japanese companies already operating in the United States — and suggested the possibility that there is no meeting of the minds between the United States and Japan on the issue.
"No, no, no," Lutnick responded. "We're on the same page."
U.S. officials have repeatedly said that the money is essentially a payment in exchange for lowering tariff rates — or raising them less than threatened — and that any failure in honoring the commitment could result in tariffs being increased. If the president is 'unhappy' with the progress, tariffs will 'boomerang' higher, Bessent has said.
In the CNBC interview, Lutnick noted the connection between the money and tariff rates.
'Japan has offered to buy down their tax from 25% to 15%. They offered us $550 billion investment fund,' he said.
Japan and the United States reached an agreement on July 22 to set the 'reciprocal' tariff at 15% and the auto tariff at the same rate. Lutnick said that the two countries are working to get the terms of the deal down on paper, and that progress is quickly being made.
The lack of an agreement document has been a major issue in Japan, especially among politicians in Tokyo.
"Every night and every morning, we are finishing the documents,' Lutnick said. 'These are weeks away for the Japan and Korea model, but the other models are set.'
On Tuesday, SoftBank Group said it will purchase $2 billion worth of Intel shares, though the company declined to confirm whether the announced investment is part of the $550 billion pledge.
U.S. tariffs are already starting the bite. Japanese exports to the United States in July fell 10.1% year on year, declining for the fourth consecutive month. Auto exports to the United States dropped 28.4% year on year in value terms and 3.2% in volume.
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