Side effects of US trade deals are appearing: How Trump is collecting heavy price of tariff cuts | World News

Washington: US President Donald Trump’s latest trade deals with India and other countries are starting to yield results. The tariff cuts came with the condition that these countries invest heavily in U.S. projects.

Japan was the first country affected by this policy. The trade deal with Tokyo reduced tariffs on Japanese goods to 15 percent, but in return the country agreed to invest in numerous U.S. projects worth billions of dollars.

The Trump administration confirmed that Japan will provide $36 billion in financing for three major projects, including a deepwater crude oil export facility in Texas, a synthetic industrial diamond facility in Georgia and a natural gas power plant in Ohio.

The $33 billion Ohio power plant will be the largest natural gas-fired facility in the state. It is expected to produce 9.2 gigawatts of electricity annually. This exceeds the state’s total electricity demand. The facility will be operated by SB Energy, a subsidiary of Japanese technology investor SoftBank Group.

Japan will invest $2.1 billion in the GulfLink deepwater crude oil export facility in Texas, which is projected to export $20 to $30 billion worth of crude oil each year.

The synthetic industrial diamond facility in Georgia will produce diamond grain to fully meet US demands. Operated by Element Six, part of the De Beers Group, the facility will produce high-pressure synthetic diamond grain used in advanced manufacturing and semiconductor production. Currently, the United States relies heavily on China for this supply.

The US trade strategy is seen as a combination of easing tariffs and leveraging foreign investment to strengthen domestic infrastructure and reduce dependence on other countries for critical supplies. The Japan agreement shows how tariff reductions are directly linked to investment commitments. This also points to a shift in the way US trade policy translates into domestic economic projects.

The move also underscores a larger strategy to ensure supply chain security, especially in industries where the United States has previously relied on China. The Trump administration wants to balance the benefits of international trade with long-term industrial and energy growth in the United States by tying trade deals to domestic investment.